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February 12, 2012
Article on 2012 Estate Planning
Unbelievably, but in a cruel and completely unjustified instant replay of 2010, the current estate tax is scheduled to expire at the end of the year. Again with the uncertainty. Again with the doomsday scenarios (unlikely), the procrastinating politicians (a given), and the entire exercise in futility (a constant).?
Estate planners may be experiencing some estate tax reform fatigue by now, but, yes, the temporary estate tax fix enacted at the end of 2010 (The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010) is set to expire at the end of this year. And Congress can probably be counted on to provide the usual gridlock, missed deadlines, mixed signals, and 13th-hour ?fix? with some retroactive repairs and ambiguous new rules.
Or the world may simply end on December 21, 2012. So good news, high estate tax exemptions might get another extension, but bad news, total Mayan apocalypse.
This is our annual review of predictions, forecasts, rule summaries, and cost of living adjustments. However, we can?t merely recite the rules and conditions applicable to 2012 without at least peeking ahead at the potential for Judgment Day in 2013?and whatever doomsday scenarios may apply to the Federal estate tax.
Rapture Sightings
Doomsday has been lurking about of late. A well-publicized end of the world was predicted by radio host Harold Camping. He pinpointed the event as commencing with a ?Rapture? at 6 p.m. (New York time) on May 21, 2011, followed swiftly thereafter by a Judgment Day that would sweep around the Earth. Much to the chagrin of those who abandoned their life savings based on this prediction, this nonevent passed with only a flurry of Rapture jokes.?
The doomsday du jour is based on the Mayan ?Long Count? calendar, which anticipates the conclusion of the current 5,125-year era on December 21, 2012. After that, we start to degenerate into apocalyptic chaos. Or not.
Federal transfer taxes aren?t going to end the world as we know it; to be realistic, with so few estates affected by them for so many years, their relevance has become overstated. Yet the dramatic repeal of estate taxes provided a ?Rapture? moment, if you will, and, after a decade of phasing in (the Congressional version of the Mayan Long Count), estate tax repeal actually arrived.
However, a complex budgetary failsafe that was inserted into parliamentary/operational procedures of Congress, thanks to the late Senator Byrd and the eponymous Byrd Rule, resulted in an automatic ?repeal of the repeal? sequence that would have caused a reversion to 2001-vintage tax rules in 2011. To wit, Doomsday.
Congress narrowly averted this horror?by rescheduling its arrival until January 1, 2013. Thanks to this maladroit planning, we may now re-experience the legislative procrastination that allowed the estate tax repeal to take effect in 2010, as well as the bizarre retroactive fix that arrived at the end of 2010 to create a two-year period of limbo.
To view the article in its entirety, clike here:? Download EA112 Final
February 12, 2012 in Articles, Estate Planning - Generally, Estate Tax | Permalink
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