• Estate and Gift Planning in 2014 and Beyond
  • March 11, 2014 | Authors: Quincy Cotton; Stuart J. Gross; Mark David Rozen
  • Law Firm: Roberts & Holland LLP - New York Office
  • While Federal estate and gift tax rates have decreased in recent years, they continue to be a significant burden. Under current law, the top marginal rate for the Federal estate and gift tax is 40% (although, because of how the taxes are calculated, the effective estate tax rate is generally significantly higher than the effective gift tax rate). The generation-skipping transfer tax, an extra layer of tax that is imposed, in addition to the estate or gift tax, on transfers that "skip" a generation (e.g. from grandparent to grandchild), is imposed at a flat rate of 40%. However, the amounts that taxpayers are permitted to transfer before these taxes apply - the cumulative exemptions and the annual exclusions - have been increasing.