Gift tax $5,000,000 exemption may be expiring

As of today, you can give up to $5,000,000 free of estate or gift taxes to your children or grandchildren, pursuant to the new estate planning rules signed into law by President Obama in December 2010. However, Congress is currently considering reducing that amount significantly, and shortening the time frame by which gifts can be made. Since we don't know what will happen to the estate tax rules after 2012 (whether they will keep the $3.5 million tax exemption, or lower it), if you're in a position to do so, now is the time to take advantage of the $5 million exemption. This may be gone by the end of 2011, or even sooner.