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.