Wednesday, June 15, 2011

Countdown to 2013

The turmoil over the estate tax continues. Congress acted late last year to nail down a new and simplified estate tax structure for 2011 and 2012 after allowing 2010 to pass without an estate tax at all. However, that new law is only temporary and expires at the end of next year. If 2009 and 2010 are any indication, Americans are unlikely to know how to plan their estate to take into account an estate tax for beyond 2012 until the last moment.

In the mean time, a massive lifetime gift tax exemption of $5M is available for individuals ($10M for most couples) to shift wealth out of their estate to avoid being subject to an estate tax. This is up from only $1M in the recent past. This makes now a prime time to take advantage of planning opportunities for those who would not otherwise be able.

As with most planning, timing is critical and with the uncertainty of 2013 drawing closer every day, it is imperative that those concerned about the estate tax and asset protection take action right away.

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