2011 Estate Planning Update


On December 17, 2010, the President signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 which contains, among other things, important changes to the federal estate, gift and generation-skipping tax laws.

With respect to decedents dying after December 31, 2009, the amount of the federal estate tax exemption available to each person is $5 million and the maximum estate-tax rate is 35%. The gift-tax exemption available to each person is also raised to $5 million (i.e., it is reunified with the estate tax exemption).

The Act also provides for “portability” of the estate tax exemption between spouses. Portability means that any unused portion of the estate tax exemption of the first spouse to die would be available to the estate of the surviving spouse. For example, if a spouse passes away, using only $1 million of his/her estate tax exemption, then $9 million would be available for use by the surviving spouse’s estate.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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