The good news is that the New Year’s day
passage of the American Taxpayer Relief Tax Act Of 2012 or ATRA ended 12 years
of uncertainty about how much could pass tax free; what the tax will be on
transfers above that amount; and even whether there would be an estate tax at
all.
What’s still in play are the cute tax tricks
that some of the best minds in the field have devised to leverage or pack more
into the tax-free amount.
Americans can rest easy now that
the fiscal cliff debacle is over. But
some professionals have started to realize that there were some very real
questions left on the fiscal cliff table as it relates to key “tax tricks.”
While significant estate
planning laws are settled, there remain more than a few important estate
planning “tools” left hanging in the air. These tools likely will be
low-hanging fruit in future discussions.
The American Taxpayer Relief Tax
Act Of 2012 (ATRA) finally ended some 12 years of estate planning uncertainty
(or so we can only hope). The certainty includes such matters as various tax
rates and the exemptions amounts for the estate tax, gift tax, and
generation-skipping tax. But ATRA didn’t settle many technical questions raised
in the past few years, both on and off the campaign trail.
So, what issues and devices
should we watch? A recent Forbes
article titled “Congress May Tighten The Belt On Cute Tax
Tricks” lists some sore subjects and possible new areas of taxation.
These include:
- Grantor
Trusts: might just get added back into the Grantor’s estate. - Dynasty
Trusts: might just limit the extent of your dynasty. - GRATs:
“Grantor Retained Annuity Trusts” (GRATs) might become much more demanding and risky. - Family
Limited Partnerships: might become much less valuable as your ability to
take discounts is curtailed.
The original article is worth
your time, especially if you are concerned that future technical rules may
swoop in and sully some well-designed estate planning. However, for those
conversant with this subject, they will recognize that this talk is nothing new
and these estate planning devices have been repeatedly targeted in the past.
Be sure to consult qualified legal
counsel if you have questions about how future changes in the law may impact
your estate planning.
For more information and articles on
estate planning and elder law topics, please visit our website
and sign up for our free monthly e-newsletter. You can also friend
our law practice's Facebook page (R Christine Brown).
Reference: Forbes
(January 16, 2013) “Congress May Tighten The Belt On Cute Tax
Tricks”