Once again, we have had a year of changes and planning possibilities as to federal estate, gift and generation-skipping transfer (GST) taxes. On December 17, 2010, President Obama signed into law The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Act) that temporarily extended the Bush tax cuts for 2011 and 2012, and increased the gift, estate and GST tax applicable exclusion amounts for that period to an historic high level of $5 million. This temporary increase provides significant tax saving opportunities. Because of the uncertainty that these opportunities will remain available until the end of 2012, given the current, ever-changing economic and political landscape, we strongly recommend that you contact us as soon as possible if you have any interest in taking advantage of gifting opportunities. In addition to the increased applicable exclusion amounts, the 2010 Act retroactively reinstated the federal estate tax for decedents dying in 2010, with an option to opt out of the estate tax and receive only a limited basis step-up.

The Trusts and Estates Practice at Katten Muchin Rosenman LLP is pleased to provide you with a summary of some of the most significant state and federal developments from the past year, along with important, time-sensitive recommendations for you to consider for planning before year-end.