New Tax Law Likely to Open 'Floodgates' for Wealth Transfers; CPA Financial Planners Available to Discuss Implications

WASHINGTON (Dec. 17, 2010) — New gift and estate tax provisions in the $853 billion tax bill that President Obama is expected to sign into law this afternoon are likely to prompt a wave of wealth transfers during the next two years as the wealthy adjust their financial planning strategies.


Under provisions of the new law, the wealthy get a bigger tax break. They can now give away up to $5 million during their lifetime — $10 million for a couple. That’s up from the previous $1 million limit ($2 million for couples). This is a big change because it not only takes assets from their estates but removes any appreciation on those assets during their lifetime. That further enhances the value of wealth transfer between generations because it reduces the estate tax at death.


The provisions as written in the new law are effective for two years.


“This is a game-changing provision, one that will be the focus of financial planning for 2011,” said Lisa Featherngill, CPA/PFS, who chairs the American Institute of Certified Public Accountants’ committee for the Personal Financial Specialist credential. “The floodgates are going to open for wealth transfers.”


Members of the AICPA’s Personal Financial Planning section are available to comment on this and other planning implications of the new law.