Article on Ways to Use the $5 Million Estate and Gift Tax Exemption While You Still Can

Lewis Saret (Federal Tax Attorney, Washington D.C.) recently published an article entitled, Easy Ways to Use the $5 Million Estate and Gift Tax Exemption While You Still Can, The Estate Planner, (July 2012). Provided below is the introduction to his article:

Virtually all estate planners agreethat the estate, gift and GST transfer tax provisions of the Tax Relief,Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“TRA 2010”),and especially the $5 million ($5.12 million in 2012) gift tax exemptionprovided by TRA 2010 (sometimes referred to herein as the “unifi ed credit”),offer an unprecedented opportunity to reduce their client’s transfer taxexposure. Unfortunately, many clients are reluctant to move forward with estateplanning to take advantage of TRA 2010’s favorable transfer tax provisions. Thisfrequently results from two key causes. First, clients hate the addedcomplexity that is frequently associated with the most effective estate planningtechniques as well as the techniques. Second, and of greater importance to mostclients, clients (including those who are extraordinarily wealthy by any measure)are highly reluctant to make gifts, which are an integral component of mostestate planning techniques, because of the fear that they may need the gifted assetsthemselves at some point in the future. This column discusses some techniquesthat are less complicated than many others and which address the fear thatclients may have that they may need the gifted assets themselves in the future.