Estate Planning: Is Now the Time?
Right now, business owners have a chance to save considerably on gift and estate taxes—but that window is closing fast. “Since 2010, the U.S. has seen a perfect storm of high exemption— up to $5,120,000 for an individual in 2012—and a low 35% tax rate,” says Phil London, a partner in the Tax Services Group of Wiss & Company. Those levels, set by the 2010 Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act, will expire at the end of 2012. Unless Congress acts, estate and gift tax rates will revert in 2013 to $1 million exemption with a 55% tax rate. “The message we’re getting out to all our clients is that it would be risky to assume the current conditions will prevail in 2013,” says Edward Townsend, who heads Wiss & Co.’s estate and gift practice. Moreover, if you’re thinking of implementing strategies for estate and gift taxes, don’t wait until it’s close to the end of the year, Townsend cautions. “Attorneys who are knowledgeable in these areas—changing wills, setting up trusts, getting valuations, doing transfer documentation—are going to be very busy. And since most entrepreneurs own closely held businesses, these hard-to-value assets require more time.”
To read the entire article published in the August 2012 issue of The New York Enterprise Report, please click here.