In 2010, taxpayers and their advisers were presented with a real gift from Congress – an increase of the estate tax exclusion to $5 million and a corresponding increase to the lifetime gift exclusion from $1 million to $5 million. This window of opportunity came with a short shelf life, with both provisions set to expire at the end of 2012. However, this window gave taxpayers substantial time to plan and think through their alternatives and options.
This window of opportunity may be closing a lot quicker than we think. The Congressional “super committee” set up by President Obama to address our government’s budget crisis is considering potential revenue raising ideas, including a quick end to the $5 million exemption.