Reflecting On the Past - Succession Planning and Constant Changes in Federal Tax Law

The last two years have been very exciting and challenging. As soon as the Republican leaders figured out that President Obama’s definition of finding compromise and achieving consensus meant everyone acknowledging that he was the only brain in the room and agreeing with his ideas, it was assumed that that the President Bush tax cuts were going bye-bye. Consequently, the estate and gift tax rates were going back to 55% and the estate, gift and generation skipping tax credits and exemption were going back to $1MM.  All the attorneys, accountants and technical gurus were forecasting a perfect storm for the supreme taxacrat—without burning any political capital he could just continue in an unproductive deadlock by being naturally condescending and arrogant; he could achieve a tax increase on small business who he defined as rich; and he could blame the deadlock and resulting tax increase on the Republicans. Because of this, starting in early 2011, the tax planning community has been working on the utilization of the estate, gift and generation skipping tax credits under the assumption that after December 31, 2012, they would be lost. An extraordinary amount of emotional energy has been spent convincing clients that the days of procrastination are over. Use-it-or-lose-it is had become a reality. The days of excuses were over. To read the end of this article, click here.