What will happen to estate taxes in 2013? Right now, you may as well try to predict what the weather will be on Jan. 1 than count on new laws from a contentious Congress still debating the scenarios.
The estate and gift tax exemptions that were set by the 2010 Tax Act are the most advantageous in almost a century, but these are slated to disappear on Jan. 1, 2013:
Estate, gift and generation-skipping transfer (GST) tax exemptions of $5.12 million for single taxpayers ($10.24 million for married taxpayers filing jointly) with a 35 percent maximum tax rate.
Portability provision that allows for the transfer of the unused portion of a deceased spouse’s estate tax exemption to a surviving spouse.
If Congress does nothing, then the lifetime estate and gift tax exemptions will fall to $1 million with estate taxes reset to 55 percent.
If the Obama administration plan prevails, the lifetime estate tax exemption will fall to $3.5 million with estate taxes reset to 45 percent. The gift tax exemption would remain at the 2001 level of $1 million.
This continued environment of uncertainty is why a lifetime relationship with your Personal Family Lawyer® is so important. The reality is no one can predict what the estate tax situation will be at the time of your passing. So a plan, prepared by our office, that keeps up with your life and the law is the way to go to ensure your family pays the least amount of estate taxes no matter what Congress does.
If you’d like to learn more about minimizing taxes through estate planning, call our office today to schedule a time for us to sit down and talk.