As we enter the second half of 2012, it is important to consider certain time-sensitive estate and gift planning opportunities. The gift and GST tax exemptions were increased to $5,120,000 for 2012 – the highest exemptions in history. With just five months left until the exemptions are scheduled to revert back to $1 million as a part of the expiration of the extended Bush tax cuts (absent further legislation), time is running out to use your full gift and GST exemptions if you are interested in doing so.

$5 Million Gift and Generation Skipping Transfer (“GST”) Tax Exemptions

The gift and estate tax exemptions are unified under current law. This means that if you use your $5,120,000 exemption today, your exemption remaining at your death will be $0. That said, there are several benefits to using your gift and GST tax exemptions to make a large lifetime gift now, rather than waiting until death...