Illinois Estate Planning and Expiration of Tax Exemption

In his article in the Wall Street Journal Online, Charles Passy points out that the current federal tax exemption on estates and gifts is set to change on January 1, 2013. The exemption is currently $5.12 million and will change to $1 million. Individuals should consider making large gifts under the current limits so that they can reduce the size of their estates, and the accompanying taxes due, when they die.

No one knows what Congress will do regarding the $1 million exemption which will become law on the first of next year. While many Republicans have advocated eliminating the tax completely, President Obama has proposed a $3.5 million exemption. Accordingly, the current $5.12 million exemption may not be available again and may be worth taking advantage of while it is possible.

Consult your estate planning attorney for further information.

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