Thursday, January 3, 2013

New Estate Tax Law 2013

The American Taxpayer Relief Act of 2012 made only one change from the 2012 estate tax laws: the top tax rate was increased from 35% to 40%. The gift, estate and GST tax exemption remains at $5 million, indexed for inflation (since 2011). For gifts made in 2013 and for decedents dying in 2013, the exemption is $5.25 million for a single person. In addition, the gift, estate and GST tax exemptions remain unified. The new Act also makes exemption portability between spouses permanent (a boon to those who inadvertently forget to plan their estates, but a wolf in sheep’s clothing that should not be relied upon if at all possible – call or email us to find out why).

Thankfully the Administration’s other revenue raising proposals, including eliminating short-term GRATs, requiring dynasty trusts to pay estate taxes after 90 years, limiting the benefits of intentionally defective grantor trusts, and reducing the availability of intra-family entity-based valuation discounts are not part of the law.

As always, please don’t hesitate to contact me with any questions or concerns. 

All the best,
Joe
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Donlon & Associates, PC provides high quality, focused legal counsel to clients of all ages and wealth levels in the following areas:
Donlon & Associates, PC serves clients throughout New York City and Long Island, including Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and Staten Island.
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