The short answer is that we do not know for sure. One source states that this
"may" happen. But, it does not seem that anyone can do anything but guess whether
or not this will happen at this point in time. As we continue to learn
more, I will update you with the facts.
What is very important NOW is the fact that existing gifting strategies
provide for a great opportunity to reduce a person's tax burden. Why
is this? Well, the reason is that
the Federal gift tax exemption is currently at $5 million. (Remember, however,
that CT is at $2MM, so being exempt from Federal doesn't necessarily
mean you are exempt from Connecticut).
Thus, if a person wants to reduce their potential estate tax burden, and
wants to provide for kids, grandkids, sisters, brothers, nieces, nephews,
and other loved ones,
during their lifetime, they can do so up to the exemption amount in their lifetime without paying
a gift tax. If they take into account their annual exclusion, per donee,
the amount gets even bigger.
So wouldn't anyone do this who has a taxable estate? The biggest concern we hear about these gifting strategies is that folks
don't necessarily want to give up
outright control. Many people have loved ones who could use the help, but those loved ones
probably aren't in the best position to take a lump sum, and it may
be that the donor is concerned that they will need the income during their
lifetime. Estate and Gift planning strategies can avoid these problems by r
educing the tax liability AND providing income to the gift-giver for a
pre-determined period of time.
Of course if the rules change on us, these opportunities could be gone.
The Super Committee is expected to propose a Bill outlining any changes
on November 23, 2011. If you are considering doing some gifting at this point in time, it is
probably a good opportunity to have those discussions with your financial
advisor and Estate Planning Attorney sooner than later. If you want to
talk with a Connecticut estate planning attorney now
click here for the contact information.