Family Wealth Alert: Congress Addresses Estate, Gift and GST Tax Law
The American Taxpayer Relief Act of 2012 (ATRA), signed by President Obama on January 2, 2013, prevents steep increases in estate, gift and generation-skipping transfer (GST) tax that would have otherwise applied in 2013. ATRA makes the exemption from each of these taxes $5 million, indexed for inflation after 2010 ($5.25M for 2013), and increases the tax rate from 35% to 40%. ATRA also continues to allow “portability” of any unused estate tax exemption from a deceased spouse to his or her surviving spouse. All changes are effective for individuals dying and gifts made after 2012. Finally, the annual gift exclusion is increased to $14,000 for 2013.