Estate Tax Post-2012: Gazing in the Crystal Greenbook

11:59 am Uncategorized

Crystal ball e1300129123589 Estate Tax Post 2012: Gazing in the Crystal GreenbookLew Saret’s Wealth Strategies Report blog at takes a look at the Greenbook – what tax lawyers call the Treasury Department’s “General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals” – for the Obama administration’s current thinking on estate taxes beyond 2012:

Estate and gift tax, GST to 2009 levels – in 2013, the administration’s proposal is for estate taxes to return to $3.5 million, gift taxes to return to $1 million and the generation skipping transfer (GST) to return to just over $1 million.

Permanent portability – the Greenbook proposes making portability – where a surviving spouse is allowed to use a deceased spouse’s unused estate and gift tax exemption – permanent in 2013.

Estate tax value required as basis – would require the income tax basis on bequeathed property to equal the estate tax value.

Valuation discount limitations – proposes rules that would limit the ability to achieve valuation discounts significantly and gives the IRS added authority to issue new regulations to that effect.

10-Year limit on GRATs – we knew this one was coming.  The Greenbook proposes making GRAT (Grantor Retained Annuity Trust) terms no less than 10 years, applicable to those GRATs created after (and if) this rule goes into effect.

90-Year limit on dynasty trusts – proposes that on the 90th anniversary of the creation of a trust, the generation-skipping transfer (GST) would end.

Get started by contacting our Orange County asset protection estate planning law firm as soon as possible.


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