The Fiscal Cliff in Estate Planning
Much has been written about the "fiscal cliff" and the end of low tax rates on investments when the Bush tax cuts expire on January 1,2013. But it also is impacting estate planning. The estate exclusion is set to roll back to $1 million, with a 55% tax bracket, on New Year's Day. Even if Congress grants an extension, something will happen next year and the facts are clear: With enormous and growing deficits, some form of estate tax is probably going to survive.
David T. Phillips, my estate planning specialist, says that the current Generation Skipping Tax allowance of $5.12 million per person is going to be eliminated on Jan. 1.
Call it capital gains, income tax on IRAs or just simply an obtrusive estate tax. They all are transfer taxes and you need to plan for them while you have the ability to do so. Dave Phillips' Estate Planning Solution can be your road map for how to traverse the potential mines and traps Congress and the IRS can lay for you.