Proposed Changes to the Federal Estate, Gift and Generation-Skipping Taxes
Each February when the President releases his Budget for the following year, Treasury releases the General Explanations of the Administration's Revenue Proposals (also known as the Greenbook). Because 2014 is an election year, action on some of the proposals in the Green Book are unlikely this year. However, there are likely to be significant changes beginning in 2015.
The Obama Administration proposes to roll back the estate, gift and generation-skipping tax (“GST”) to 2009 levels. Under his proposal, the estate tax and GST exemptions would roll back to $3.5 million. It is currently $5.34 million. Portability would be kept. To learn more about portability, click here. To learn more about the pitfalls of federal portability, click here. The administration also proposed to roll back the gift tax exemption to $1 million.
The administration also proposes to raise the federal estate tax rate from 40 percent to 45 percent.
Remember the fiscal-cliff negotiations in January of 2013? Remember when the President and others told us that the estate, gift and GST exemptions were permanent? The only thing you can count on when it comes to estate tax planning, is an ever-changing environment. That is why it is important to routinely revisit your estate plan to ensure it is working as needed.
To learn more about estate tax planning strategies can help protect your family, visit our video tips page here.