Obama Administration Plans to Decrease Estate Tax Exemption and Increase Tax Rates

Obama recently released its 2013 budget proposal. The administration wants to decrease the estate tax exemption level from %5 million to $3.5 million, and raise the top estate tax rate from 35% to 45%. With this in mind, those with significant assets can try to take advantage of the more favorable exemption and tax rate before the conclusion of 2012.

The budget that the House recently passed does not give specific estate tax figures, but these figures should be revealed in the coming months. Rep. Paul Ryan’s budget plan is the blueprint for the House Republicans, and it rejects raising taxes and disapproves of the current instability surrounding the tax code. Mitt Romney takes the position of eliminating the “death tax” altogether.

Trying to anticipate where the federal estate tax sill land next is an added complexity to any estate planner’s job, so implementing diverse strategies that can be successful in different estate planning climates is key.

See Obama Administration’s 2013 Budget: Estate Tax Planning Changes, Digital Journal, May 3, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.