News 24 Jun. 2021
Curtis successfully defends foreign states' procedural privileges in the UK Supreme Court
News 23 Jun. 2021
Ibrahim Elsadig joins Curtis as Partner in Dubai
News 09 Aug. 2021
Curtis, Mallet-Prevost, Colt & Mosle enters into association with Chevalier Law in Singapore.
Event 23 Apr. 2021
Partner Borzu Sabahi to speak on Damages, Enforcement and Annulment of Arbitral Awards at Executive Training Program hosted by the Government of India and the Indian Institute of Foreign Trade
Client Alert 13 Oct. 2021
Green Claims Code: How the UK Competition and Markets Authority is saying “enough” to corporate greenwashing
Event 21 Sep. 2021
Partner Simon Batifort Lectures on the Defense of States in Investment Arbitration at Université Paris Nanterre
News 15 Oct. 2021
Claudia Frutos-Peterson and Elisa Botero Ranked Among the Top 100 Female Lawyers in Latin America by Latinvex
News 13 Oct. 2021
Curtis Joins The Appellate Project to Promote Appellate Practice to Diverse Law Students
News 20 Sep. 2021
Curtis Successfully Defends the Sultanate of Oman and Oman Aluminium Rolling Company LLC in U.S. Department of Commerce Trade Case
News 16 Aug. 2021
Curtis Establishes Presence in Saudi Arabia
Client Alert 05 Oct. 2021
Proposed Legislative Changes to Federal Estate, Gift and Trust Taxation
Publications 22 Sep. 2021
Client Alert 24 Jun. 2021
U.S. Insight: Update on Virtual Notarization (Executive Order 202.7) During the COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021)
U.S. Insight: Update on Virtual Witnessing (New York Executive Order 202.14) During The COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021)
Publications December 2010
On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Authorization and Job Creation Act of 2010 (the Act). Among the key points of the Act are several provisions addressing the expiring estate, gift and generation-skipping (GST) transfer tax provisions of current law.
Unification of the Transfer Taxes
In general, the Act sets the estate, gift and GST exemption at $5 million (indexed for inflation beginning in 2012) and sets the maximum tax rate at 35%. The exemption applies in 2010, except with respect to the gift tax, which remains at $1 million until January 1, 2011.
Estate Tax Provisions
The Act made several changes to the prior estate tax regime, which provided for no estate tax in 2010, but reverted to a $1 million exemption and a maximum tax rate of 55% for estates of decedents dying beginning on January 1, 2011.
Gift Tax Provisions
As noted above, beginning in 2011, the gift tax exemption is unified with the estate and GST tax at $5 million. The unification of the gift and estate tax regimes provides powerful new opportunities for transfer planning for wealthy individuals.
GST Tax Provisions
The GST Applicable Rate in 2010 is zero, which results in no GST tax on transfers in 2010. Beginning in 2011, there is a $5 million exemption (indexed for inflation beginning in 2012) and a maximum tax rate of 35%. As with the estate tax, the time to file a GST return is extended to no earlier than nine months after the date of enactment of the Act.
The zero tax in 2010 presents one-time planning opportunities for currently non-exempt generation-skipping trusts and for gifts to grandchildren or trusts for their benefit. Such opportunities will expire after December 31, 2010.
The provisions of the Act are only a temporary repair, expiring on December 31, 2012. The Act provides no guidance for planning beyond 2012. If Congress does not address these issues again before December 31, 2012, we will find ourselves in the same uncharted waters as we did only a few days ago.
For more information about the new Tax Relief, Unemployment Insurance Authorization and Job Creation Act of 2010, or if you have questions about how this new law may effect your current estate plan, please contact us.
Robert W. Sheehan