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Wealth Transfer Tax Planning for 2013 and Beyond


John A. Miller


University of Idaho College of Law

Jeffrey A. Maine


University of Maine School of Law

September 17, 2013

2013 B.Y.U. L. Rev. 879-948

Abstract:     
On January 1, 2013 Congress avoided the tax part of the so called “fiscal cliff” when it passed the American Taxpayer Relief Act of 2012 (ATRA). Among its many impacts this law prevented the application of a number of sunset provisions that would have dramatically altered the operation of the federal wealth transfer taxes. Instead Congress made permanent two significant transfer tax provisions introduced as temporary measures in 2010: the indexed basic exclusion amount and the deceased spousal unused exclusion amount. The latter provisions are sometimes referred to as the portability rules. ATRA also introduced a new maximum transfer tax rate of 40%. In addition ATRA made permanent a deduction for state death taxes and prevented the return of the state death tax credit. Thus, the main transfer tax emphasis of the actions taken by Congress in ATRA was to stabilize the wealth transfer tax system in a fashion that eliminates or reduces its planning impact on most taxpayers while also permanently establishing a significant new planning tool for the wealthy, the deceased spousal unused exclusion (DSUE) amount.

In this article we summarize the operation of the federal wealth transfer taxes in the wake of ATRA and describe the basic tax planning techniques for wealth transmission. In doing so, we offer a thorough analysis of the operation of the portability rules and discuss their planning virtues and drawbacks. The overall design of this article is to bring the general practitioner into the current wealth transfer tax planning picture while providing references to more detailed treatments of particular topics within this broad field.

Number of Pages in PDF File: 67

Keywords: estate tax, taxation, estate planning, wealth transfer taxes

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Date posted: February 10, 2013 ; Last revised: March 18, 2014

Suggested Citation

Miller, John A. and Maine, Jeffrey A., Wealth Transfer Tax Planning for 2013 and Beyond (September 17, 2013). 2013 B.Y.U. L. Rev. 879-948. Available at SSRN: http://ssrn.com/abstract=2214422 or http://dx.doi.org/10.2139/ssrn.2214422

Contact Information

John A. Miller (Contact Author)
University of Idaho College of Law ( email )
P.O. Box 442321
Moscow, ID 83844-2321
United States
208-885-2257 (Phone)
Jeffrey A. Maine
University of Maine School of Law ( email )
246 Deering Avenue
Portland, ME 04102
United States
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