Authors: Daniel A. Swick, Paul R. Herman, Brian E. Raftery, Michelle Bergeron Spell; Herrick, Feinstein LLP (New York, NY, USA)
Under provisions of the current federal gift and estate tax laws, an individual can transfer a total of $5,120,000 of wealth free of federal gift and/or estate tax, either during life or upon death. Additionally, such transfer can be made to a trust that will ultimately pass the assets to grandchildren and more remote descendants,
free of the generation-skipping transfer tax.
However, unless new legislation is enacted, these favorable provisions will expire on December 31, 2012, and the exemptions will be reduced from $5,120,000 to $1,000,000 per individual. Furthermore, the maximum tax rate for the estate, gift and generation-skipping taxes will be increased from 35% to 55%. Click here to read the entire alert.
