The Blatt Watch by Peter Blatt: Retirement Plans: Warning: Federal Estate Tax Rules are Changing Again

From the desk of Peter Blatt

May 10, 2013

How are your retirement plans? The Permanent Reduction of Federal Estate Taxes is No Longer Permanent!

This is also known as the story of the boy who cried wolf – all over again.

Yesterday, I was reading with my 9 year old son a bed time story. It was a Star Wars “Return of the Jedi” Book. It was all about how one trooper lied about how much trouble he was in to gain a promotion. And then when real trouble hit nobody believed him and the Republic failed. This reminded me of the newest “obligation or reform” by our President.

President Obama presented his 2014 budget on April 10, 2013. The President’s proposal aims to increase Federal Estate Taxes by decreasing the estate, gift and generation-skipping transfer (GST) tax exemptions back to their 2009 levels. The Federal Gift Tax Exemption would revert from the $5,120,000 back to $1,000,000.

Assets owned at death over $3,500,000 will be subject to Federal Estate Taxes and also Generation Skipping Transfer Taxes (that ADDITIONAL nasty tax if you give assets to your grandchildren). The Federal Estate Tax Rate and the Generation Skipping Transfer Tax rate will be increased to 45%. This would cause our New York and New Jersey residents to be taxed at 55%! The annual exclusion will go back down from $14,000 per done to $13,000 per year.

Also, two of the most successful tax reducing techniques will no longer be available. These are GRATs and Family Limited Partnership discounts. There are two more very successful techniques – and they’re left intact by the budget proposal. Call me and we’ll go over them together.

The bottom line: what does this mean for you?

If you have more than $3,500,000 of total assets (or plan to have that much when you pass away) it is time to plan to reduce your future estate taxes now. Plan in a way in which you do not give up control of your assets and that you still have access to your investments. Work with a person who is knowledgeable with both Estate Planning laws and Financial Planning methods.

If you haven’t talked to me in a while about your estate plans, give me a call today to schedule a FREE consultation. It’s on the house. We need to go over your planning together and make sure you and your family prepared for these kinds of changes. They’re coming, and they’re coming fast. Call me for an appointment at (561) 625-0900 x2 or email me at

Until next time,

Peter Blatt

Posted in

Peter Blatt

Ready to Take The Next Step?

For more information about any of the products and services listed here, schedule a meeting today or register to attend a seminar.

Or give us a call at 561.625.0900