"Put not your trust in money, but put your money in trust."
Oliver Wendell Holmes, Sr.


Temporary gift tax exemption expires soon President Obama’s Proposals

Temporary gift tax exemption expires soon
President Obama’s Proposals
As you aware from prior emails, there is a temporary $ 5,120,000 gift tax exemption that is set to expire at the end of 2012. President Obama has made proposals to substantially limit the ability to effectively plan an estate (read Forbes article). Briefly, his proposals would:

  1. Reduce the lifetime gift tax exemption from $ 5,120,000 to $1,000,000.
  2. Reduce the estate tax exemption from $ 5,120,000 to $ 3,500,000.
  3. Increase the top federal gift and estate tax bracket from 35% to 45%.
  4. Eliminate valuation discounts for Intra-Family transfers. Thus discounts for minority interest and lack of marketability will not be available.
  5. Require GRATs be a minimum of 10 years.
  6. Eliminate perpetual dynasty trusts.
  7. Eliminate the estate planning benefits of the Grantor Trust rules.

Even if these proposals are not enacted, the transfer tax rules for 2012 will “sunset” on December 31, 2012. Thus, the gift and estate tax exemptions will drop to only $1,000,000 and the top bracket will increase to 55%.

There is only 10 months left to take advantage of the 2012 rules.

Plan Today, Save Tomorrow

If you are looking for the very best legal advice in estate and succession planning, or estate and trust administration, contact the law firm of Maurice Kassimir & Associates, P.C.

(212) 944-1377

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