Although by now it may be old news to you, McDermott Will & Emery is issuing another reminder that the transfer tax laws are now quite favorable for transferring wealth. Assuming you have never made taxable gifts, through December 31, 2012, you can transfer up to $5.12 million and pay no transfer tax under current law.* Beginning on January 1, 2013, however, unless and until Congress takes further action you must pay tax on transfers exceeding only $1 million, and at significantly higher transfer tax rates.
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Therefore, if you wait until 2013 to transfer wealth, you could pay significantly more transfer tax than if you transferred that same wealth this year. Although results will vary based on your personal circumstances, if you are contemplating a large wealth transfer to friends or family members, you should consider the transfer tax savings you could achieve by acting this year.