Quinn DeAngelis, P.C.
Kierland Business Center
15849 N. 71st Street, Suite 100
Scottsdale, Arizona 85254
ESTATE PLANNING UPDATE
1. 2009 Annual Gift Tax Exemption: $13,000 per donor, per donee.
2. Lifetime Gift Tax Exemption: $1,000,000 per donor.
3. 2009 Estate Tax Exemption: $3,500,000 per donor.
4. Marital Deduction for Transfers to U.S. Spouse: Unlimited.
5. 2009 Generation Skipping Transfer Tax Exemption: $3,500,000.
6. Top Federal Estate, Gift and Generation Skipping Tax Rate: 45%.
7. Federal Legislation: Congress continues to explore changes to the Federal Estate and GST tax structure. Replacing the estate tax with a carryover basis rule, changing the tax rates, making the tax exemptions portable, increasing/unifying the amount of the exemptions and implementing anti-discount rules are all concepts that have been introduced as bills in the legislature recently. However, it is likely that instead of total repeal, the current Estate Tax Exemption will simply be extended and remain at $3,500,000. Otherwise, we are going to have to address total repeal in 2010 followed by a $1,000,000 exemption and a top estate tax rate of 55% in 2011. We should hear more on this subject in the next six to nine months.
8. State Legislation: The Arizona Trust Code became effective January 1, 2009. The new state law provides detailed notice and reporting requirements, easier modification and termination rules, and broader creditor protection provisions. Revocable trusts prepared prior to 2005 should be reviewed. If you would like me to review your trust in light of the new code, please contact me, otherwise we will discuss how the new rules apply to your trust at our next meeting.
9. Planning Opportunities: The current combination of relatively low asset values and interest rates gives us a unique opportunity to transfer significant wealth, with little adverse tax consequences. Gifts to spouses, children, grandchildren and charities and intra-family sales and loans, whether outright or in trust, continue to be viable strategies for those individuals with assets in excess of $10,000,000. Depending upon a person’s desires and portfolio, there are several techniques available to reduce or defer estate tax obligations and if you are interested in exploring these options at this time, please contact me.