Joint Select Committee on Deficit Reduction to Make Recommendations on November 23, 2011

There is speculation that The Joint Select Committee on Deficit Reduction (sometime referred to as the “Super Committee”), the bipartisan Congressional committee charged with producing legislation to cut $1.2 trillion from the federal deficit over the coming decade, is going to recommend a reduction in the federal gift, estate and generation-skipping transfer (“GST”) tax exemptions when it releases its recommendations on November 23.  More specifically, included in the rumored recommendations are the following:

• Reduce to $3.5 million the current $5 million estate tax exemption and $5 million GST tax exemption, which are in place through 2012 under current law
• Reduce to $1 million the current $5 million gift tax exemption, also in place through 2012 under current law.  (Note:  there is further speculation that the Super Committee will recommend reducing the federal gift tax exemption to $1 million as of December 31, 2011 or as early as the November 23, 2011.)

While it is too soon to tell whether or not these rumors will be accurate, we would suggest that anyone who was planning to take advantage of the current exemptions, contact their attorneys promptly to discuss how this could affect your estate planning.

Commonwealth Trust Company is pleased to provide this article as a guide. Commonwealth Trust Company is not engaged in the practice of law and is not providing legal advice by the provision of these materials. Commonwealth Trust Company recommends that clients seek the opinion of their attorney regarding the specific legal and tax issues addressed in this article.