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Tales from the Cliff: Estate Planning Policy for 2013 and Beyond

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Lauren Keenan
BKK Wills, Trusts and Estates Newsletter
February 2013

For those of you watching Congress as 2012 came to a close and wondering what would happen to the economy if we fell off the dreaded "fiscal cliff," you may feel as though you lost a lot of sleep over nothing.

Congress did reach a deal in the wee-hours of New Year’s Day and despite several doomsday scenarios, from an estate planning perspective, things stayed pretty consistent. So what did the new deal entail and what does it mean for your ability to plan for the future of your estate?

The Senate bill, H.R.8, passed both houses by a wide-margin and provides for the following:

Planning has been challenging in recent years, with the looming deadline of extending the prior year’s tax cuts and increasing uncertainty as to the future of the estate tax in 2013 and beyond. The passage of this bill quiets those concerns, making the new tax rates and exemptions permanent. If Congress wasn’t able to reach this deal, tax rates would have spiked to 55 percent and the exemption for Federal Estate and Gift Tax would have dipped back to 2001 levels at just $1 million per individual.