There has been a lot of uncertainty about the tax rules – what has changed for 2013 and what has remained the same. This uncertainty includes the rules covering estate and gift taxes.
The estate tax exemption was scheduled to drop in 2013 to $1,000,000, with a top tax rate of 55%. However, the American Taxpayer Relief Act of 2012 signed in January kept that change from happening and instead brought some certainty to the estate and gift tax rules for some years going forward.
The new law permanently sets the estate and gift tax exemption at $5,000,000 and sets the top tax rate at 40%. The exemption amount is adjusted annually for inflation. That inflation adjustment puts the 2012 exemption at $5,120,000 and the 2013 exemption at $5,250,000. The annual gift tax exclusion for 2013 is $14,000 per recipient.
Now that the rules have been made “permanent,” you would be wise to review your estate plan to be sure the plan will still accomplish your wishes. Contact us and your attorney for any assistance you need.
Tags: estate taxes
Written by: Doug Rodrigues