Asset Protection Law Journal

Dramatic Year-End Changes to Federal Gift and Estate Tax

As of January 1, 2013, the federal estate and gift tax “exemption amount” will go from $5 million to $1 million.  The tax rate will increase from 35% to 55% (in some cases higher than 55%).  While Congress may change this before year-end (or make retroactive changes early next year), there is no assurance that it will do so.


If your net worth is over $1 million (remember for estate tax purposes you have to add the death benefit of all life insurance) - - you should consult with your estate planning attorney to be sure you are as protected as possible from the federal estate and gift tax.


Asset protection planning is not the same as estate planning.  But right now, asset protection planning should include a focus on the dramatic estate and gift tax changes that may become effective at year-end.

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Bradley Boyum - November 5, 2012 3:07 PM

Your reference to life insurance proceeds as being part of the taxable estate is very important. People see the exemption amount in the millions and don't realize how easy it is to reach $1 million in assets especially when you include large blocks of money such as life insurance proceeds.

I work with a lot of farmers, and with current land values over 70% of farmers in my geographic area will be over the $1 million exemption amount. They are looking at very big tax bills if the exemption drops to that level and they don't have the proper plan in place.

People should not assume that they are below the exemption amount simply because they don't have a million dollars in liquid assets.

Kenneth J. Laino of Schneider, Smeltz, Ranney & LaFond P.L.L. |
1111 Superior Avenue, Suite 1000,
Cleveland, Ohio 44114