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Estate Planning
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Estate and Trust Administration
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Representation of Owners of Closely-Held Businesses, including Succession Planning
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Family Office Services
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Tax Exempt Entities and Charitable Giving
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Complicated Tax Matters, including Controversies
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Fiduciary Litigation
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Asset Protection
Important Legal Notice
This is an important message about the federal estate tax and related taxes.
The federal estate tax has been reinstated as of January 1, 2011. The Estate Tax, together with the federal generation-skipping transfer tax (“GST Tax”), previously had been terminated as of the end of 2009. The federal gift tax has continued in effect, but with significant modifications
The rules that became effective as of January 1 of this year are temporary and, absent additional Congressional action, will change, again, as of January 1, 2013. The legislation reinstating the Estate Tax and GST Tax, and favorably modifying the Gift Tax, dictates that, as of the end of 2012, all of the federal Estate Tax, Gift Tax and GST Tax are to return to the less favorable levels and rates that previously were in existence on December 31, 2001.
The principal components of the new legislation consist of (i) the unification of the federal transfer tax exemptions, so that each of the Gift Tax, Estate Tax and GST Tax exemptions is the same as the other two exemptions, and (ii) expansion, under the unified concept, of each of the three exemptions to $5,000,000.
Contemporaneously, there also may be significant aspects of the laws of local jurisdictions that will be changed or otherwise will require examination.
Many taxpayers will need to review and make modifications to their estate plans in light of the new legislation. Failure to make the effort to conduct such a review and assessment may result in adverse implications to some taxpayers, particularly in light of the possibility that the new, expanded exemptions may be rescinded as of 2013.
In many cases, the new, but temporary transfer tax rules will provide significant tax-saving opportunities for taxpayers.
For more information about this or any other legal matter, please contact one of our attorneys:
George P. Levendis | 202.223.8341
Gal N. Kaufman | 202.223.8342
Patrick M. Schoshinski | 202.223.8343
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