The door is closing on the ability to take advantage of the gift and generation-skipping transfer tax exemptions and reduced gift tax rate made by the 2010 Tax Act. If you act before the end of 2012, you can take advantage of the $5.12 million gift tax exemption ($10.24 million per married couple) less prior taxable gifts and pay a gift tax on any excess at the current 35 percent gift tax rate. The $5.12 million gift tax exemption and 35 percent gift tax rate will expire on December 31, 2012 and be replaced on January 1, 2013 with a $1 million gift tax exemption ($2 million per married couple) and a 55 percent tax rate unless Congress acts. If you act before December 31, 2012, you have an opportunity to minimize estate, gift, and generation-skipping transfer taxes while maximizing the amounts passing to your family members or other beneficiaries.
Our white paper The Door is Closing: Taking Advantage of the 2010 Tax Act will provide you and your advisors with practical knowledge and tools for taking advantage of current law including:
- Steps you should take in determining whether to take advantage of the $5.12 million gift tax exemption before December 31;
- Advice on what property you should consider giving to your beneficiaries if you decide to act;
- Advice on whether you should give the property to your beneficiaries outright or in trust; and
- Advice on how you can increase the amount you give to your beneficiaries without paying gift tax.
We hope you find our white paper helpful to you and your advisors as you consider whether to take action before the door is closed on the opportunity to transfer significant wealth free of gift tax to your beneficiaries.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
