Estate Planning In Uncertain Times: The Impact Of The Repeal Of The Estate Tax And What You Need To Consider

A White Paper for Clients and Their Advisors Prepared by the Private Wealth Services Group of McGuireWoods LLP

Because Congress did not act in 2009 to preserve the estate and generation-skipping transfer ("GST") taxes in 2010, the estate, gift, and GST taxes, which are sometimes collectively referred to as the transfer taxes, have changed greatly from what they were in 2009. As a result of the provisions of the 2001 Tax Act, the estate and generation-skipping transfer or "GST" taxes have been repealed for one year while the gift tax remains in place with a $1 million exemption and 35% maximum rate. In 2011, unless Congress acts, the estate, gift, and GST taxes as they existed prior to 2002 will be reinstated with a 55% rate, a $1 million exemption for lifetime and testamentary transfers, and a $1 million exemption (indexed for inflation since 1999) from GST tax. Congress may or may not act to reinstate the estate and GST taxes and, if it does, it may or may not reinstate them retroactively. All of this has created an environment of uncertainty in which individuals must review their estate plans to ensure that their wishes are carried out while minimizing their exposure to estate tax. This uncertain environment may also present opportunities for individuals to take advantage of the current law.

McGuireWoods has prepared a white paper discussing those matters of which individuals need to be aware in light of the current uncertainty and different strategies that individuals may wish to consider in order to take advantage of the current law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.