Happy New Year. Moving into 2013, my previously mentioned horrible prognostication abilities did not end when 2012 ended. I did not foresee Congress making the $5 million unified credit permanent. The unified credit is the amount of money one can give away tax free during life or at death. Although in some fairness, I am not sure anyone in the estate planning community foresaw it either.
Quick estate planning facts from the fiscal cliff legislation:
1. Unified credit is $5 million and will be indexed for inflation.
2. The estate tax rate will be 40%.
3. The unified credit is portable which means that the first spouse to die does not need a trust to utilize the credit.
For the rest of 2013, I will be out of the prediction game save for Alabama defeating Notre Dame next week (with fingers crossed that I am wrong and ND wins the National Championship).