The Window May be Closing

For the Opportunity to Transfer Significant Wealth Tax Free

In December 2010, congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.  This established new rules affecting estate taxes, gift taxes and generation skipping transfer taxes.  These rules only apply to tax years 2011 and 2012 and the Sunset provisions apply to most of these provisions.

Prior to this law, the general rules allowed for $3,500,000 worth of transfers tax free at your death, but only $1,000,000for gifts during your lifetime.

The current rules allow for the equivalent transfer of up to $5,000,000 to be transferred at your death or during your lifetime. In the right set of facts & circumstances this may be a great opportunity to do significant gifting during the next 14 months. Remember these rules only apply through 2012.

After reviewing your personal balance sheet you realize that your success over the years have allowed you to accumulate net worth in excess of $10,000,000. One asset in your portfolio is your very profitable small business - generating profits annually in excess of $500,000. The business is worth at least $3,000,000.

Your hope is the business will succeed to the next generation.  You might consider taking advantage of the new rules by gifting the shares to your 3 children who are actively involved in the business. By gifting nonvoting shares to the kids, you retain voting control, shift income to lower tax brackets, and remove a very valuable asset from your estate. Pretty cool, huh?

If you would like to explore further these new rules and how they might apply to your specific situation, please contact your Meaden & Moore representative or Joe Mentrek at (216) 241-3272 or