“Update: Proposed Estate and Gift Tax Legislation Expands Gifting Opportunities for Estate Planning Minded Individuals"

We recently reported on proposed estate tax legislation introduced in the House of Representatives, which would, in part, make the 2009 Federal estate, gift and generation-skipping transfer (“GST”) tax rates and exemptions permanent and would also eliminate many valuation discounts. We also predicted that many estate tax proposals were likely to be introduced in the coming months. One such proposal, S. 722 (entitled “The Taxpayer Certainty and Relief Act of 2009”), was introduced by Montana Senator Max Baucus, Chairman of the Senate Finance Committee, in the United States Senate on March 26, 2009. S. 722 contains a number of important estate and gift tax provisions, including making permanent the 2009 estate and GST exemptions and the estate and gift tax rates going forward. In addition, S. 722 would index the exemption amount, meaning that the exemption amount would increase with inflation. This Stroock Special Bulletin focuses primarily on two key estate and gift tax provisions of S. 722 that potentially could yield significant opportunities for estate planning minded individuals, namely a proposed increase of the Federal gift tax exemption to $3,500,000 and portability of the exemptions between spouses.