Last Friday President Obama signed into law the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.” The implementation of this bill signaled the end of a last-minute race at the end of this year to avoid significant tax increases scheduled to occur January 1, 2011. There are a number of ramifications of this bill, none of which are insignificant.
One outcome was a temporary, two-year “fix” of the federal estate tax. There are many details of this provision although a few points are; the federal estate tax exemption, generation skipping transfer tax exemption and lifetime gift tax exemption have all been “reunified” and set at $5 Million per person, and the federal estate tax exemptions are now “portable” (i.e. a spouse can use their deceased spouses unused federal estate tax exemption amount). There are many planning opportunities created by these changes that must be addressed in the next two years and evaluating those opportunities in context of a broad wealth plan will be more important than ever.
