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Law Offices of Steven M. Adler, PLLC
Committed to Meeting the Needs of Each Individual Client |
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Adler Law E-Newsletter
May 2012 |
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Law Offices of Steven M. Adler, PLLC
666 Old Country Road, Suite 605
Garden City, New York 11530
Phone: (516) 876-1105
Fax: (516) 794-0463
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Greetings!
Welcome to our May 2012 edition of the Adler Law E-Newsletter. This month, we discuss the fact that time is soon running out for U.S. citizens to take advantage of the extraordinary estate planning opportunities provided for in the 2010 Estate and Gift Tax Act.
Please "Like" my firm's Facebook page where you can also download free sample New York Power-of-Attorney, Health Care Proxy and Living Will forms. Thank you.
As always, if you have a question or concern with respect to any particular legal subject, please contact me or Dolores Jannuzzi, Esq. and we would be happy to discuss your topic in a future issue of Adler Law. In addition, if you know of someone who may be interested in receiving this newsletter, please forward it to them by clicking the "Forward Email" link at the bottom of this page.
Thanks and have a great day. Sincerely, Steven M. Adler |
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The 2010 Estate and Gift Tax Act
The Time For You To Take Advantage Of The Act Is Running Out!
 The 2010 Tax Act, which went into effect on January 1, 2011, and which reinstated the estate tax with a significantly higher applicable exclusion amount, now $5.12 million ($10.24 million per married couple) and a lower maximum tax rate of 35 percent, is set to expire on December 31, 2012. Unless Congress acts, the prior estate tax regime, with a 55 percent maximum estate tax rate and only a $1 million applicable exclusion amount, will be reinstated.
The current tax law has provided us with an unprecedented opportunity to move substantial amounts of wealth out of individuals' estates. But we only have six more months to act.
The 2010 Tax Act also provides for "portability" between spouses of the estate tax applicable exclusion amount for estates of decedents dying in 2011 and 2012 if both spouses die before 2013. Portability means that if one spouse does not fully utilize his or her entire $5 million applicable exclusion amount, the unused portion can be used by the surviving spouse's estate. This provision is intended to avoid the need for credit shelter trusts in estate planning documents. Unfortunately, both spouses must die before 2013 in order to benefit from the portability provision.
For gifts made in 2011 and 2012, the Act limits the maximum gift tax rate to 35 percent and increases the applicable exclusion amount to $5 million. Given the fact that the Act will sunset without further Congressional action on December 31, 2012, we are advising clients that it would be prudent to implement estate planning techniques utilizing lifetime gifts before the end of the year sunset date. This provides an opportunity to move significant amounts of wealth, including all future appreciation, free of estate and gift taxes.
Many states have separate estate tax regimes with lower applicable exclusion amounts than the federal applicable exclusion amount. New York in particular, has a $1 million estate tax exclusion amount. It is critical that the estate plans of individuals living in or owning property located in such states address such estate tax exposure as well.
Renenber, the Act is only temporary because it sunsets on December 31, 2012. It is impossible to predict whether it will be extended in either its current or some modified form, especially given the fact that it is a political football with both major political parties. If Congress fails to act, the Act will lapse and the estate tax will revert a $1 million federal applicable exclusion amount and 55 percent maximum federal estate and gift tax rate.
Accordingly, we strongly recommend that our clients carefully examine their current situation in order to determine if they can take advantage of the current generous $5.12 million exemption before it expires at the end of 2012.
Please do not hesitate to contact us with any questions that you might have or if you would like to discuss how you can take advantage of the current opportunities in estate planning. |
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The Law Offices of Steven M. Adler, PLLC are committed to providing their clients with the highest level of professional legal services at reasonable prices. Steven M. Adler, Esq., along with the rest of his law firm's highly competent support staff, gives all of his clients the personal attention and the legal expertise which they are entitled to receive. The Law Offices of Steven M. Adler, PLLC takes pride in the quality, effectiveness and efficiency of their legal services.
Law Offices of Steven M. Adler, PLLC
666 Old Country Road, Suite 605
Garden City, New York 11530
Phone: (516) 876-1105
Fax: (516) 794-0463
Click here to read recommendations and reviews of my service on Stik.com |
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