Estate and Gift Tax exemption change in 2012

Florida does not have a state estate tax, but Florida residents are subject to federal estate taxes. Over the past year or two, Floridians planning their estates have had to deal with a highly changeable federal estate tax situation. Now, the federal estate tax exemption is changing again.

Beginning Jan. 1,2012, the lifetime unified gift tax and estate tax exemption will increase from $5.0 million per individual to $5.12 million per individual. For married couples, it changes from $10 million to $10.24 million. The portability provision that was introduced in 2011 will remain in effect in 2012, meaning that the surviving spouse, in addition to his/her own $5.12 million exemption, will be able to use any portion of the deceased spouse's exemption that went unused.

These are pretty generous exemptions - but they are set to expire on Dec. 31, 2012. As of right now, if Congress does not act, the federal estate tax exemption will be set at $1 million per individual, $2 million per couple, starting in 2013.

The current generous exemption presents many opportunities for passing more tax-free money to your children and others. Schedule a consultation with our estate planning attorneys to discuss your options. Read more about estate and gift taxes and wealth transferring strategies, click here.