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  {   An Estate Planning Update: How the American Taxpayer
      Relief Act of 2012 Can Change Your Estate Plan




      Peter V. Arcese, JD, MA, LL.M (Tax)
      Estate Planning & Mediation
      11 Broadway, Suite 615, New York, NY 10004
      (646) 261-1200, peter@pvacounsel.com
   Maximum Estate & Gift Tax Rate increased to:
        40%.
       Estate Tax Applicable Exclusion for 2013:
        $5,250,000.
       Reunification of Estate and Gift Tax rates and
        applicable exclusion amount.
       “Portability” of the deceased spouse unused
        exclusion (DSUE) remains available.




Be aware that …
   Fewer estates than ever will be subject to
       Federal Estate Tax.
      State Estate Taxes may still be imposed & affect
       planning.
      E.g. in New York State, a $5,250,000 estate
       which is free of Federal estate tax, would incur
       a state tax of: $420,800 without proper
       planning.




Beware …
   Portability allows for spouses to potentially
        maximize use of their applicable exclusion
        without the use of trusts.




Be aware that …
   Portability depends on an Executor being
       appointed, filing a federal estate tax return, and
       making an election.
      The amount of unused exclusion depends on
       the amount remaining from the “last deceased
       spouse.”
      Portability will not protect assets from tax on
       appreciation during the survivor’s lifetime.
      Portability will not provide the asset protection
       and management advantages of a trust.




Beware …
   Estates & trusts reach the highest Income Tax
        Marginal rate with income of $11,950.
       The rate on ordinary income is: 39.6%.
       The rate on capital gains is: 20%.




Be aware …
   Income tax planning is now a key element for
       reducing the tax consequence associated with
       the benefits of estate planning with trusts.
      Estates & trusts may also be subject to the new
       3.8% “Medicare” surtax, resulting in a marginal
       rate of 43.4%




Beware …
   Charitable Remainder Trusts can help reduce,
        defer, or eliminate capital gains &/or the 3.8%
        surtax.
       Direct contributions from an IRA to a charity
        by donor’s over 70 ½ years of age are still
        available for 2013.




Be aware …
   peter@pvacounsel.com




Questions?

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More to Gain, More to Lose

  • 1. More to Gain, More to Lose { An Estate Planning Update: How the American Taxpayer Relief Act of 2012 Can Change Your Estate Plan Peter V. Arcese, JD, MA, LL.M (Tax) Estate Planning & Mediation 11 Broadway, Suite 615, New York, NY 10004 (646) 261-1200, peter@pvacounsel.com
  • 2. Maximum Estate & Gift Tax Rate increased to: 40%.  Estate Tax Applicable Exclusion for 2013: $5,250,000.  Reunification of Estate and Gift Tax rates and applicable exclusion amount.  “Portability” of the deceased spouse unused exclusion (DSUE) remains available. Be aware that …
  • 3. Fewer estates than ever will be subject to Federal Estate Tax.  State Estate Taxes may still be imposed & affect planning.  E.g. in New York State, a $5,250,000 estate which is free of Federal estate tax, would incur a state tax of: $420,800 without proper planning. Beware …
  • 4. Portability allows for spouses to potentially maximize use of their applicable exclusion without the use of trusts. Be aware that …
  • 5. Portability depends on an Executor being appointed, filing a federal estate tax return, and making an election.  The amount of unused exclusion depends on the amount remaining from the “last deceased spouse.”  Portability will not protect assets from tax on appreciation during the survivor’s lifetime.  Portability will not provide the asset protection and management advantages of a trust. Beware …
  • 6. Estates & trusts reach the highest Income Tax Marginal rate with income of $11,950.  The rate on ordinary income is: 39.6%.  The rate on capital gains is: 20%. Be aware …
  • 7. Income tax planning is now a key element for reducing the tax consequence associated with the benefits of estate planning with trusts.  Estates & trusts may also be subject to the new 3.8% “Medicare” surtax, resulting in a marginal rate of 43.4% Beware …
  • 8. Charitable Remainder Trusts can help reduce, defer, or eliminate capital gains &/or the 3.8% surtax.  Direct contributions from an IRA to a charity by donor’s over 70 ½ years of age are still available for 2013. Be aware …
  • 9. peter@pvacounsel.com Questions?