How the permanent estate tax will impact life insurance ownership

Permanent-is-five-years-under-Obama-estate-tax-planBy Kenneth M. Cymbal | HealthLifePro

On Jan. 1, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (ATRA) which creates “permanency” in the estate planning area for the first time since the passage of the Economic Growth and Tax Relief Act of 2001 (EGTRRA).

ATRA provides a degree of certainty that had been missing, and it may be the impetus needed to motivate clients to update their estate plan in order to protect their family and to minimize taxes.

In the transfer tax area, ATRA permanently establishes the same high exemption amount for gift tax, estate tax and generation-skipping transfer tax purposes. It also indexes this amount for future inflation. ATRA permanently extends portability, one of the key features of the Tax Relief Act of 2010 and sets the highest marginal estate/gift tax rate at 40 percent.

So, under ATRA, each taxpayer has available a unified gift and estate tax exemption of $5.25 million in 2013. This exemption (also referred to as the applicable exclusion amount) is permanent, unified, indexed for inflation, and portable.


If you’d like to discuss estate planning, contact Laura Bianchi, head of Rose Law Group Estate Planning/Asset Protection Department,






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