This post is probably a little late, but, after much bickering at the end of 2010, there is some certainty in our tax code for two more years (until it becomes a political issue again for the next presidential election). It is, consequently, simpler for attorneys and accountants to help individuals with their estate plans.
Here are three of the biggest tax implications for 2011.
(1) The Estate tax. For the next two years, a person can die and avoid federal tax on estates less than $5 million.
(2) Gift taxes. Annually, a person may can exclude gifts of up to $13k per year per donee without detrimental tax consequences. And individuals can make lifetime gifts of up to $5 million and exclude the transfer from tax by filing a gift tax return allocating his or her lifetime gift tax exemption.
(3) The Generational Skipping Tax (“GST”). The GST primarily exists to prevent families from avoiding estate tax in younger generations by skipping a generation and transferring property to the next generation. Individuals can now set up trusts for younger beneficiaries and use a $5M GST exemption.
Because of the new found clarity in the tax code, it is advisable to consult with accountants and attorneys to begin planning.