Trusts & Estates Published Article on Potential Impact of Joint Committee on Estate and Gift Tax

Over the past two months, most of the Super Committee’s work has been conducted behind closed doors, making speculative any predictions regarding its recommendations. However, according to a report released by the White House’s Office of Management and Budget, “the Administration remains opposed to the extension of these high income tax cuts past 2012 and supports the return of the estate tax exemption and rates to 2009 levels.”

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In light of the pressing need to find new sources of revenue, speculation has been swirling that the Super Committee may propose legislation that will reduce the $5 million federal gift tax exemption to the $1 million 2009 levels before the end of 2012 (even though the Office of Management and Budget Report refers only to the estate tax). Speculation includes the possibility that this may occur as early as Nov. 23 (the date on which the Super Committee must issue its proposal). While other practitioners believe that an accelerated change in the law is unlikely to occur, it’s impossible to predict the outcome with certainty.

As noted last week in this blog, client’s should consider “the advisability of accelerating gifting in 2011 (possibly prior to Nov. 23) and potentially using strategies designed to leverage the historically high $5 million gift tax exclusion.”

See: Possible Changes to Gift and Estate Tax Laws