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Estate and Gift Tax Provisions of New 2010 Tax Law

| Dec 22, 2010 | 2010 Tax Act

On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“the Act”). Although the primary feature of this legislation is a two-year extension of the Bush-era income tax cuts, the Act also addresses the repeal of the estate tax for 2010 and its reinstatement in 2011. The legislation re-enacts the estate tax for 2010 (but, grants an option to elect back into the repeal) and provides generous estate and gift tax exemptions and rates for 2011 and 2012. Unfortunately, the Act is only a temporary measure — in 2013, the pre-2001 estate and gift tax provisions will return, with the potential to impose a much greater tax burden on estates and gifts.

A summary of the provisions of the new Act is presented under our newsletter heading. In addition, we offer a discussion of the opportunities and pitfalls that it presents for your personal estate planning.