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Estate and Elder Law

The Estate Tax Game: It's Only the First Inning

With regard to negotiations on the estate and gift tax, it is much too early to tell who the winners and losers will be in 2013. There is plenty of wrangling to come as the White House and Congress muddle through the issue. As they say in baseball, the score in the first inning isn't important. But if you're someone who likes to keep track, here's an update from the press box:

Currently, the federal estate and gift tax is unified. Every individual has a lifetime exemption of $5 million. Thus, an individual can pass $5 million tax free; married couples, twice that much.  The current law also has a "portability" feature, meaning that a surviving spouse has the right to use any unused portion of the deceased spouse's exemption. Lastly, the top tax rate is 35%.

This law is set to expire on Dec. 31, 2012. As part of the Administration's deficit reduction package, the following has been put on the table for 2013: 

  • Reducing the exemption from $5 million to $3 million
  • Increasing the top tax rate from 35% to 45%.

No mention has been made as to whether the portability clause would remain, or if the gift and estate tax would remain unified.

Second inning, coming up.You never know what can happen.

Attorney Joseph S. Karp is a Florida Bar Certified and Nationally Certified Elder Law Attorney focusing on Elder Law, Probate, Estate Planning, Asset Protection, Special Needs Planning and Estate Litigation. He is AV rated by Martindale Hubbell. Mr. Karp is the founder of The Karp Law Firm, a South Florida law firm with offices in Palm Beach Gardens, Boynton Beach and St. Lucie, Florida.  Mr. Karp was named a 2011 SuperLawyer by SuperLawyer Magazine and a member of the 2011 Florida Legal Elite by Florida Trend Magazine. He is admitted to practice law in New York as well as Florida. Visit Mr. Karp's Florida Elder Law and Estate Planning website. 

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