More pages in this section

“The New Federal Estate Tax Laws – Permanent?”

In January, the President signed the American Taxpayer Relief Act of 2012, which among other things, permanently raised the federal estate, gift and generation skipping transfer tax exemptions to $5,000,000, indexed for inflation. It also set the estate tax rate at 40%.

April 2013

In January, the President signed the American Taxpayer Relief Act of 2012, which among other things, permanently raised the federal estate, gift and generation skipping transfer tax exemptions to $5,000,000, indexed for inflation. It also set the estate tax rate at 40%. This permanent tax law is a source of rare relief for estate and tax planners, who for more than a decade have been forced to plan around tax laws with scheduled increases and decreases. This relief may be short-lived, however. President Obama recently released his 2014 budget proposal, which calls for $3,500,000 estate and generation skipping transfer tax exemptions and a $1,000,000 gift tax exemption, without inflation adjustments. The estate tax rate would be set at 45%. If adopted, this estate tax law would become effective in 2018. Whether this proposal is successful or not remains to be seen. However, the lesson is that if such drastic changes to the estate tax law are being considered just three months after the President signed the new tax law in January, the estate tax laws are always on the table, and planners and clients should not get too comfortable with any “permanency.”


Return



Back to Top
Boston

30 Federal Street
Boston, MA 02110
617-292-7900

Providence

40 Westminster Street
Suite 1100
Providence, RI 02903
401-861-8200

SouthCoast

128 Union Street
Suite 500
New Bedford, MA 02740
774-206-8200

e-Alert signup