The new estate tax legislation proposed by Sen. Reid (D. NV) contains some pleasant surprises for wealthier Individuals.
First, as expected, it proposes to raise the estate tax exemption amount to $5 million per person with a maximum 35% estate tax rate for the next 2 years.
Additionally, the proposed legislation is retroactive to January 1, 2010, so that the estates of people who died in 2010 can select the new 2011 law, or the basis allocation law that has been in place during this year.
Most unexpected,the new law also proposes a 2 -year window where there is a $5 million gift tax exemption per person, with a gift tax rate of 35%. There would similarly be a $5 million Generation Skipping Tax exemption.This could give individuals a huge planning opportunity to transfer assets with great growth or income potential to the next-generation at little or no transfer tax cost.
And now we wait to see what happens next...
Deirdre R. Wheatley-Liss is a shareholder of the Law Firm of Fein, Such, Kahn & Shepard, P.C., with offices in Parsippany and Toms River, New Jersey. She concentrates her practice in the areas of Elder Law, Estate Planning and Administration, Business Planning and Tax Law. Deirdre's individual clients range from their 20's to their 80's and beyond, while her business clients range from start-ups with exciting new ideas to 100+ year old business ventures. Clients seek Deirdre's advice and assistance with a variety of planning issues relating to identifying and meeting their personal, family and business goals, whether in a planning or crises situation.