On October 30, 2010, the Wall Street Journal published Last Chance to Foil a Gift Tax, by Anne Tergesen. This article is excellent, but its title does not reflect the great insight that the article provides on the GST tax.
For the right people, there are excellent estate planning opportunities in 2010:
When the GST tax returns on Jan. 1, the Internal Revenue Service will allow each grandparent to shield a total of about $1.34 million, according to JPMorgan Private Bank. Advisers are urging families with a desire to give more to take action by Dec. 31. "We're having a lot of conversations about the fact that there's no GST tax this year," says Elizabeth Schurig, a partner at Schurig Jetel Beckett Tackett in Austin, Texas.
Ms. Schurig is urging one client to give each of her 12 grandchildren up to $2 million by year end. This, she says, would "reduce the grandparent's estate, and it has no GST tax implications"—and any future appreciation on the assets would occur outside the estate.
The move would require the woman to write a big check to the IRS, of course. The reason: A gift of that magnitude would trigger the gift tax, which is currently 35% but is set to rise to 55% in 2011.