Despite a deadline of Dec. 31, 2012, which would have meant the largest tax hike in U.S. history, Congress waited until Dec. 32nd (that’s an intentional typo) to pass the American Taxpayer Relief Act of 2012, or ATRA.
While many planners were leveraging the fear that the Federal Estate and Gift Tax Exemption would revert to $1 million to obtain new clients, the newly enacted "permanent" Federal Estate and Gift Tax Exemptions instead remained at $5 million, and were indexed for inflation to $5.25 million in 2013. The top estate and gift tax rates, however, increased from 35 percent to 40 percent. Also to be noted is that portability became a permanent part of the estate tax regime going forward.
