president obama budget proposal estate planning

Change is on the Way: President Obama’s proposals for estate planning in 2013 and beyond - WEALTH WATCH - Trusts & Estates Magazine (JEH: The current administration's proposals make planning during 2011 and 2012 even more important. The current $5 million gift tax exemption, which is the highest in history (except during times when these federal transfer taxes did not exist), would be decreased to the $1 million exemption under the 2001 tax act. The estate and generation-skipping transfer (GST) tax exemption, which are also currently $5 million, would return to their $3.5 million levels under the 2001 tax act. In addition, the proposals suggest a 90 year "term limit" on trusts designed to optimize these exemptions (essentially a tax-oriented version of the rule against perpetuities) in order to limit their effectiveness (which of course means taxing those assets more often as they pass from one generation to the next). Consequently, planning to utilize the current exemption is critical for anyone whose assets would exceed the revised exemptions, including those whose assets would appreciate beyond those limits. With the possibility of future inflation, that might be more folks than anyone thinks now.)