Big Tax Savings to Expire in December

August 21, 2012

There is a short window of opportunity remaining to take advantage of significant estate and gift tax savings. Currently, the estate and lifetime gift tax exemptions are at record high levels of $5,120,000 per individual. This means an individual can make gifts during their lifetime or pass wealth after their death totaling $5,120,000 without incurring any estate or gift tax liability. This amount doubles for a married couple. Additionally, the federal estate and gift tax rate, for gifts in excess of that amount, is capped at 35% – the lowest rate in history.

Unless Congress enacts a new law, these limits will expire on December 31, 2012. Beginning January 1, 2013, the estate and lifetime gift tax exemption will plummet to $1,000,000 per individual, while the top federal estate and gift tax rate will jump to 55%. Therefore, the clock is ticking to take advantage of these historic tax savings.

Gifts of this magnitude may result in substantial tax savings for a family, but only if the gift is completed before the end of 2012. Transferring assets to an irrevocable trust or other entity, outright gifts or purchasing a life insurance policy are just a few of the ways to obtain tax benefits while directing the flow of income to your children or grandchildren.

For more information about "Big Tax Savings to Expire in December," contact Steven A. Brezinski at or 608.283.6723 or Melissa K. Warner at or 608.283.6782.