Most of our clients are aware that the federal gift and generation-skipping transfer (GST) tax exemptions have been temporarily increased to $5 million for calendar year 2011 and (because of an inflation adjustment) $5.12 million for 2012. In 2013, these exemption amounts are scheduled to be reduced to $1 million (with an inflation adjustment for the GST tax exemption) unless Congress acts.
Many of our clients have taken advantage of the increased gift and GST tax exemptions to make large gifts this year. Other clients have told us that they are considering making large gifts, but for various reasons have not yet done so.
For the past several years, rumors have circulated that Congress is about to take various actions regarding exemptions and tax rates. The most recent rumors we have heard suggest that Congress might act as early as Nov. 23, 2011, to reduce the gift and GST tax exemptions. We do not put much stock in these rumors. However, we also did not expect that we would ever see a year such as 2010 when the federal estate tax was repealed, so we recognize that our crystal ball may be cloudy.
Clients who intend to make use of the current large gift and GST tax exemptions should evaluate the risks of waiting to make their gifts. Your estate planning lawyer at Bingham would be glad to discuss options with you for taking advantage of the increased exemptions while they are still available.
Please contact the following members of Bingham’s Estate Planning practice for more information: