What the Tax Deal Means for Estate and Gift Taxes

Lawmakers retained the $5 million individual exemption for gift and estate taxes and kept it indexed for inflation, while raising the tax rate to 40% from 35%. These changes are permanent, so advisers and families won’t have to think for a moment about a relative dying in one year versus another. The recently added “portability” provision also is permanent now. It allows a dead spouse’s estate to transfer to the survivor any unused portion of the $5 million exemption. This means a married couple doesn’t lose out on their total $10 million exemption simply because they didn’t engage in pre-death legal planning.

Wall Street Journal  January 4, 2013