On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012.  This Act permanently sets the federal estate and gift tax exemption at $5 million per person ($10 million per couple), adjusted annually for inflation after January 1, 2011.  The exemption for 2013 is $5.25 million.  The estate and gift tax provisions are "permanent" in the sense that there are no sunset provisions and no scheduled decreases in the exemption amount for future years.  Moreover, the Tennessee inheritance tax will be gradually phasing out over the next three years, resulting in no Tennessee inheritance tax after the year 2015.
 
For most taxpayers, this tax legislation has removed the emphasis on estate tax planning and put the emphasis back on the real reasons they should do estate planning: taking care of themselves and their families.  Many taxpayers now have the freedom and flexibility to simplify their estate plans significantly.

Please contact a member of the Chambliss Estate Planning & Taxation practice group if you would like to discuss updating your estate plan to take advantage of the new, higher exemption amounts.