For those planning to tidy up your estate by going ahead and utilizing your $11 million+ gift tax exemption this year, you may want to acquire and apply some extra drafting talent.
A number of proposals are circulating which reduce the exemption to as low as $1 million but the most difficult proposals may be provide that the reduction is applied retroactively to as early as January 1, 2021. In other words, if you made an $11 million gift relying on the current exemption and a reduction was applied retroactively, you would be faced with a gift tax on $10 million. (“gulp”). While situation is not likely, it is not impossible.
