With the American Taxpayer Relief Act of 2012 (the “ATRA ”) passed and the fiscal cliff safely averted, the time has come to turn your attention to your estate plan.
What Did the ATRA Accomplish? The fiscal cliff threatened to reduce the estate and gift tax credit from $5 million to $1 million, and raise the maximum estate tax rate from 35% to 55%. By contrast, the ATRA:
•Set the unified estate and gift tax exemption amount at $5 million, indexed for inflation (indexed at $5,250,000 in 2013)
• Set the GST exemption at $5 million, indexed for inflation (indexed at $5,250,000 in 2013)
• Preserves portability – the ability of spouses to utilize each other’s unused exemptions – resulting in a total exemption amount of over $10 million this year for a married couple
• Permanently sets the maximum estate tax rate at 40%...
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