You may have read in this space previously that the current lifetime estate tax exemption of $5.12 million is scheduled to decrease at the end of 2012. If you haven’t heard that or read it here, it’s true. However, that has caused some confusion for some people.
Some people think that they need to shrink their estates under the new limit immediately. For most of you, that is simply not the case. Most of you will not pass away immediately. The yearly gift tax exemption limit is not scheduled to go away. It should actually go up in 2013. That means that most of you can continue to take advantage of the yearly limit in the coming years.
However, that does not mean that you have time to wait to start a gifting program. You need to start now, if you want your estate to be as small as possible when you do pass away. Talk to an experienced estate planning attorney about setting a gifting program as soon as you possibly can.