Advising Estate Planning Clients After the 2012 Tax Act

On January 1, 2013, at almost the last possible hour, Congress approved the American Taxpayer Relief Act, which is the first permanent set of estate, gift, and generation-skipping transfer (GST) tax rates and exemptions in 12 years.Despite speculation and attempts over several years focused on options ranging from total repeal to a return to pre-2001 law, the law now made permanent by Congress is identical to 2012 law, except that the compromise rate is 40 percent rather than 35 percent.The Senate approved this legislation in a bipartisan 89-8 vote a couple of hours after 2013 had begun.The House of Representatives approved it an hour before midnight in a much less bipartisan 257-167 vote, with twice as many Democrats as Republicans supporting it.