The Obama Administration’s proposed fiscal year 2012 budget includes suggestions for permanent changes to the rules governing gift, estate and generation-skipping transfer taxes.  Currently these taxes follow rules contained in the 2010 Tax Relief Act which is slated to sunset at the end of 2012.

The proposal provides for a gift, estate and GST tax top bracket of 45%, a gift lifetime exclusion of $1 million and an estate and GST lifetime exclusion of $3.5 million.  Currently the top bracket is 35% and the estate and GST exclusion is $5 million.  The proposal also is to make permanent the spousal portability of estate exclusion introduced by the 2010 Tax Relief Act.

A few other rules regarding estate tax would also be changed.  Most notably, assets protected from taxation by a GST would enjoy that protection for a maximum of 90 years.

The future of the estate tax is still uncertain and will remain so until Congress takes action on the matter.

For more information on the estate tax or other estate planning issues, contact the Chicago estate lawyers at Horowitz & Weinstein.

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