Thursday, October 11, 2012

Financial & Estate Planning - Estate Planning Review—The Journal

Estate Planning Review—The Journal Special Issue

What will happen in 2013 if estate, gift, and GST tax law changes  made by EGTRRA and the 2010 Tax Relief Act sunset?

The CCH FINANCIAL AND ESTATE PLANNING Advisory Board met on July 18, 2012, to discuss what practitioners should be advising their estate and wealth planning clients to do before year end. The highlights of this discussion, moderated by Sidney Kess, include:
  • Gifting in 2012
  • Flexibility in estate planning documents
  • Planning for Portability
  • Family limited partnerships (FLPs)
  • Intentionally defective grantor trusts (IDGTs)
  • Grantor retained annuity trusts (GRATs)
  • Qualified personal residence trusts (QPRTs)
Once Congress addresses the sunset of the EGTRRA and 2010 Tax Relief Act provisions, CCH will reconvene the Advisory Board to get the Members’ reactions and insights and will report the findings in a future issue of ESTATE PLANNING REVIEW—THE JOURNAL.

Get Insight from the Experts.

                     
What will happen in 2013 if EGTRRA and 2010 Tax Relief Act provisions sunset?

Estate/Gift/GST Tax
2012
2013
Tax Rate
35%
55%  & 5% surtax on large estates
Applicable Exclusion & Exemption Amounts
$5.12 million
$1 million (GST exemption subject to inflation through 2012)
Portability
Allowed
No longer applicable
GST special allocation, severance and late election provisions
Allowed
No longer applicable
Conservation easement liberalized rules
Allowed
No longer applicable
Estate tax installment payment liberalized rules
Allowed
No longer applicable




Income Tax
2012
2013
Individual tax rates
10, 15, 25, 28, 35%
15, 28, 31, 36, 39.6%
Capital Gains
15%
20%
Dividends
15%
20%
Medicare tax on high-income
0
0.9%
 Medicare tax on net investment income
0
3.8%


Possible 2013 Revenue Raisers
  • Limitations on valuation discounts
  • Minimum 10-year required term for GRATs
  • Limits on the term of a GST tax-exempt trust
  • Grantor trusts includible in gross estate
  • Consistent valuation for transfer and income tax purposes
  • Extended lien on deferred estate taxes
  • Five-year distribution limit on retirement distributions to non-spouse beneficiaries
  • Extension of “Bush” tax cuts—only if AGI less than $250,000

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