ESTATE TAX LEGISLATIVE UPDATE 2011

In December 2010, Congress raised the estate and gift tax exemption to 5 million dollars per person.  Now, a married couple, both U.S. citizens, may give up to 10 million dollars free of estate or gift taxes.  This exemption amount is set to last until December 31, 2012 under present law.

This change represents a very effective way to transfer wealth to family members over the next two years.   Under prior law, gifts could not exceed 1 million dollars per donor before hitting the gift tax.  Now, the donor may give up to 5 million dollars and a married couple as donors may give up to 10 million dollars free of estate and gift taxes.

This exemption amount is set to expire at the end of 2012.  It is then set to go back to the original 1 million dollars of the prior tax regime.