That is a long title, in German, for estate attorneys in the upcoming year (I spoke German growing up, as my mother and grandparents are Austrian). The estate planning world is in a state of flux. On 1/1/2010, the gift tax drops to 35% (it’s currently 45% and increases to 55% on 1/1/2011 based on current law). The gift tax is calculated on the tax-exclusive basis, making it a more tax-efficient transfer process than waiting to pay the estate tax rate. For taxpayers living more than 3 years from the date of the taxable gift, only the value of the interest transferred will be used to calculate the deceased’s taxable estate. For taxpayers living less than 3 years from the date of the taxable gift, the gift tax paid will be included in the deceased’s taxable estate. In both cases, appreciation in the value of the gift would not be included in the taxpayer’s adjusted taxable estate (source: Leimberg). There are some additional benefits, subject to the facts and circumstances, such as valuation differences between assets transferred and the value of the interest itself.
Always Asking, Never Assuming™
Christopher Holtby