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Client Alert: $5 Million Federal Estate & Gift Tax Exemption May Expire on December 31, 2012

The current, very favorable $5 million Federal estate and gift tax exemption ($10 million for married persons) may likely be expiring, going back down to $1 million ($2 million for married persons) with respect to gifts made after December 31, 2012.  Utilizing this exemption by making a gift prior to year end could potentially save millions of dollars in ultimate Federal estate taxes.

Barack Ferrazzano Kirschbaum & Nagelberg’s Tax & Business Planning Group is advising on and implementing plans that utilize this exemption, primarily, in the following two ways:

  1. When the assets to be transferred and gifted are of a personal nature (e.g., cash and passive investments), a trust document with specific provisions we developed will meet these objectives; and
  2. If the assets instead constitute business interests where the donor is active or otherwise owns a significant interest, we have formulated a limited liability company vehicle which optimizes and minimizes Federal estate, gift and income tax consequences.

We can offer assistance in both instances, either on a standalone basis or in coordination with your existing estate planner, and look forward to the opportunity to work with you. If you have any questions or would like additional information concerning these issues, please contact any of the authors listed on the left or another member of the firm.


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