Important Estate, Gift and Generation Skipping Tax Changes

Congress has passed the 2010 "Tax Relief Act" which includes enormously important provisions affecting the federal estate tax, gift tax and generation-skipping tax. This legislation impacts the tax laws in effect for 2010, 2011 and 2012, and has a sunset provision of December 31, 2012. The most significant changes are the following:

• The exemptions for federal estate tax, gift tax and generation-skipping transfer (GST) tax are increased to $5,000,000 per person ($10,000,000 for a married couple). The estate tax exemption and GST exemption are effective retroactively to January 1, 2010, although a 2010 estate may still elect to pay no estate tax (regardless of its size); the increase in the gift tax exemption is effective beginning January 1, 2011.