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Estate Planning under the American Taxpayer Relief Act

Washington has avoided the fiscal cliff for the time being with the passing of the American Taxpayer Relief Act (“Act”).  The Act addresses several key estate planning issues.  With the passage of the Act, the unified federal estate and gift tax exemption will remain at $5,000,000 per person.  The Act also permanently increased the top estate, gift and generation-skipping transfer tax rate from 35% to 40%.  Also, the Act made portability permanent for decedents dying after December 31, 2012.  This means that a spouse may use estate tax exemptions remaining from his or her predeceased spouse’s estate against his or her estate tax liability.  Further, the Act extends through 2013, the provision allowing for tax-free distributions from IRAs to public charities by individuals who are age 70 ½ or older.  A maximum of $100,000 in tax-free distributions per taxpayer is permitted under this provision. 

For more information on the Act or how the Act may affect your future estate planning needs, contact Alan Shovers, John Hegeman, Brian Williams, Allison Comstock, Shannon Frank, Steve Lavallo, Mark Samila, or another member of our Estate Planning Practice Team.

IRS Circular 230 Disclosure. To ensure compliance with U.S. Treasury Regulations governing tax practice, we inform you that any tax advice contained in the foregoing material was not written or intended to be relied upon, nor can it be used, by any taxpayer for the purpose of (i) avoiding tax penalties or (ii) promoting, marketing or recommending to another person any tax-related matter or transaction. This blog post is being provided for informational purposes only and you should consult your own tax advisor regarding your personal tax situation before making any further decisions.