For the first time in more than a decade, clients and advisors can plan their estates with a significant degree of certainty. The new tax law passed by Congress on January 1, 2013 and signed into law by President Obama avoided the so-called “fiscal cliff” and made various tax provisions “permanent,” averting much more onerous federal estate and gift tax rules.
Highlights of the American Taxpayer Relief Act of 2012 (the “Act”) that clients should consider in connection with their estate planning include:
Although not part of the Act, it is important to note that the annual gift tax exclusion amount (which is indexed for inflation) increased to $14,000 per recipient on January 1, 2013.
With this new certainty regarding how the tax laws will affect you, now is a good time to review and update your estate plan. Even if your assets are below the federal exemption amount, planning may be appropriate to maximize your Connecticut estate tax exemption and to deal with the many non-tax reasons that should be incorporated into your estate plan to keep it current.
To discuss how the American Taxpayer Relief Act of 2012 may affect your estate plan, please contact a member of our Trusts and Estates Department.
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