The new tax law
We certainly didn’t expect to find ourselves with a tax law – even if it is temporary – that gives our clients a $5 million federal estate tax exemption. But here we are!
On December 17 President Obama signed into law a tax bill that extended the Bush income tax cuts and dramatically changed gift and estate tax rules for the next two years.
So, instead of a $1 million estate tax exemption and a $1 million annual gift tax exclusion, we have $5 million exclusions for both lifetime gifts and death transfers. Wow. If only Congress could quit making these tax rules temporary. These new exclusions expire at the end of two years, so we don’t know where we’ll be then. But in the meantime we can do some real planning with these higher limits.
Jon, Laura and I intend to “study up” on how the new rules affect our clients and then to put on briefings for our clients and professional advisor friends. We’re planning on February at this point. Stay tuned!