Fred Marx and Nancy Dempze, partners with Hemenway & Barnes, were featured on an April 6, 2012, segment of MYOB (Mind Your Own Business): The Radio Show. They explained two issues important to anyone planning their estate, especially business owners.
The clock is ticking
Listeners learned that the rest of calendar year 2012 offers tax advantages that may disappear on New Years Day 2013. For example, the federal gift exemption currently sets $5.12 million as the “limit on what you can give to your family or leave to them at death without paying a tax,” according to Ms. Dempze. The law that sets that amount automatically sunsets at the end of 2012. After that, “we don’t know what it will be starting next year,” Ms. Dempze added. “It could drop back down to a million [dollars],” the amount of the exemption that was in effect for years.
While a $10 million-plus exemption for a married couple may not seem like a lot, if you own a successful business or have valuable real estate, you might want to take advantage of the greater exemption while you can, she advised. This may include “giving away a non-controlling part of your business.”
NOTE: The federal Generation-Skipping Tax Exemption– also set at $5.12 million per donor for 2012 – may return to the $1 million limit.
