2012 May Be the Year to Make Significant Gifts

By Kenneth H. Bridges, CPA, PFS     March 2012

For those with sizable estates who are concerned about the potential for estate tax, 2012 may be the year to consider making a significant transfer of wealth to your heirs.

For 2012, the exemption equivalent for the unified credit against estate and gift tax is $5,120,000.  This is an extremely high amount by historical standards, and, absent Congressional action to extend it, the amount will drop to $1,000,000 effective January 1, 2013. This means that a married couple could potentially move over $10,000,000 of wealth out of their estate tax-free in 2012, versus only $2,000,000 in 2013.  The estate tax savings involved could be in excess of $4,000,000.

While you might not be ready to turn control over this amount of wealth to your children, effective control can generally be retained through the use of a family limited partnership and/or trust.

Kenneth H. Bridges, CPA, PFS is a partner with Bridges & Dunn-Rankin, LLP an Atlanta-based CPA firm.

This article is presented for educational and informational purposes only, and is not intended to constitute legal, tax or accounting advice.  The article provides only a very general summary of complex rules.  For advice on how these rules may apply to your specific situation, contact a professional tax advisor.