Lifetime gifts are more important than ever
Abstract: The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 has created an unprecedented opportunity for affluent taxpayers to remove substantial amounts of wealth from their estates through lifetime gifts. It’s increased the gift and estate tax exemptions, and reduced the top rate for these taxes, but for 2011 and 2012 only. It’s uncertain whether Congress will make these changes permanent, so those who have the ability to make large gifts may find it beneficial to do so this year or next. This article offers details about the increased exemption, the tax-saving power of annual exclusion gifts and direct payments of tuition and medical expenses. And a sidebar explains why credit shelter trusts are still a good idea.