Hello everyone! I hope that you all are having a nice weekend, and that you are enjoying it with family and/or friends.
I will keep this short, because it is a Holiday weekend, but recently I was asked about the Federal exemption and while the change hasn't been great I thought I would touch on where it is at currently. The Federal exemption is at $5,120,000, which is up from $5,000,000 from last year. This is NOT because there was any change in the Law.
The increase from $5,000,000 to $5,120,000 is only because the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act" (otherwise known as TRA 2010) which is the legislation that increased the exemption to $5,000,000 provided that the Federal estate tax exemption, Federal lifetime gift tax exemption, and Federal generation skipping transfer tax exemption are indexed for inflation for the year 2012.
This does not affect the fact that TRA 2010 will sunset on December 31, 2012, and if no additional law is passed affecting these exemptions, they will go back down to $1,000,000, and the top rate would be 55%.
Note: The current Connecticut estate tax exemption is $2,000,000.
If you have questions about the Federal estate tax, or if you would like to speak with a Connecticut estate tax and probate attorney, feel free to visit my website for my contact information. Click here for our contact info.