Significant estate tax planning opportunities which are available under current legislation may be eliminated or severely restricted after December 31, 2012. It is therefore critical to evaluate whether steps should be taken this year to maximize estate tax savings.

For the following reasons, 2012 is the year to implement tax reduction strategies:

1. The federal law provides for a $5.12 million gift tax exemption through year-end which creates significant gifting opportunities. On January 1, 2013, the exemption is scheduled to be reduced to $1 million.
2. Powerful concepts available under current law such as valuation discounts for interests in family entities and transfers to Intentionally Defective Grantor Trusts (“IDGTs”) and short term Grantor Retained Annuity Trusts (GRATs) may be restricted under new tax legislation...

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