In January, the President signed the American Taxpayer Relief Act of 2012, which among other things, permanently raised the federal estate, gift and generation skipping transfer tax exemptions to $5,000,000, indexed for inflation. It also set the estate tax rate at 40%. This permanent tax law is a source of rare relief for estate and tax planners, who for more than a decade have been forced to plan around tax laws with scheduled increases and decreases. This relief may be short-lived, however. President Obama recently released his 2014 budget proposal, which calls for $3,500,000 estate and generation skipping transfer tax exemptions and a $1,000,000 gift tax exemption, without inflation adjustments. The estate tax rate would be set at 45%. If adopted, this estate tax law would become effective in 2018. Whether this proposal is successful or not remains to be seen. However, the lesson is that if the same President who signed the new tax law in January is willing to make such a drastic alternate proposal three months later, the estate tax laws are always on the table, and planners and clients should not get too comfortable with any “permanency”.