For high-net-worth clients, there are less than four months left to avoid the effects of potentially severe tax changes. Many advisors have undoubtedly been beseeching wealthy clients to take advantage of existing gift, estate and generation-skipping tax exemptions of $5.12 million and other wealth-transfer planning opportunities while they can. The zero hour is assumed to be Dec. 31, but could potentially be sooner if President Obama is reelected and pushes legislation through the lame duck session of Congress.
Of course, it is also possible that the current rules could be extended, but there is no assurance that many great tax planning techniques will not disappear eventually. Among the vulnerable techniques are grantor trusts, generation-skipping transfer tax allocations and dynastic trust planning, certain valuation discounts, grantor- retained annuity trusts and more.
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