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After many months of heated debate, Congress passed the American Taxpayer Relief Act of 2012 (“ATRA”), which President Obama signed into law on January 2, 2013, averting the tax side of the so-called “fiscal cliff”. ATRA permanently extends the middle-class tax cuts, raises income tax rates on the wealthiest and, hopefully, will bolster economic growth.

Just before midnight on January 1, 2013, the House of Representatives adopted the American Taxpayer Relief Act of 2012. There were few surprises except, perhaps, the extent to which numerous deduction and credit provisions remain intact. While the Act is expected to raise approximately $650 billion over the next 10 years, Congress must now contend with a February deadline to address spending reductions and the debt ceiling.

Keeping in mind that permanence and certainty are relative terms when it comes to tax legislation, Congress has finally provided a platform that allows for longer-term planning than we have had in the past. Although the American Taxpayer Relief Act of 2012 was passed too late to provide the certainty that is so important for year-end tax planning, there are still opportunities in the new year.

After briefly plunging over the “fiscal cliff” – the combination of tax increases and spending cuts that automatically came into effect on January 1, 2013 – Congress quickly passed the American Taxpayer Relief Act of 2012 (the “Act”), which has now been signed into law by President Obama. This white paper summarizes those aspects of the Act that Withers believes are the most relevant to wealth owners in the areas of gift and estate taxes, personal income tax, and business tax.

Since the election, President Obama has reaffirmed his commitment to increasing marginal tax rates for upper income taxpayers while maintaining for lower income taxpayers the tax rates that have been in place since 2001. The basic theme is to reverse for upper income taxpayers the tax benefits conferred by the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003.

One of the potential benefi ts of wealth planning is the opportunity for families to have meaningful conversations about their hopes, dreams, legacy wishes, and more. These types of planning discussions can help to create family intimacy, and help build relationship capital for the future. In this white paper, Fidelity advisor Dr. Timothy G. Habbershon outlines what he considers the three outcomes optimal for having effective family communication — and how these goals can help lay the foundation for sensitive and complex estate planning decisions.

Incentives, credits, and deductions within the U.S. tax system are currently in the spotlight, and most advisors are aware that unprecedented exemptions for gift and estate taxes are set to expire on December 31, 2012. Less clear, however, is how families can manage their assets to capitalize on the credits before the window closes. This article looks at some of the reasons families have not taken advantage of expiring gifting opportunities.

Advisors should protect their clients who own fine art and other collectibles from financial loss with properly executed tax and estate planning. This article highlights two recent examples of how oversights, such as defective title, create marketability challenges that may result in substantial financial consequences for collectors.

The “Tax Relief, Unemployment Insurance & Job Creation Act of 2010” (TRA 2010) reunified the gift and estate tax systems and increased the amount a person can transfer to children and future generations during lifetime or at death to $5,000,000. As of the beginning of 2012, indexing puts that number at $5,120,000. The window on this opportunity to fully fund a generational legacy of over $10 million per couple will close on December 31, 2012. Beginning January 1, 2013, the amount passing free of gift and estate tax is back to an indexed $1,000,000.

Modifications, reformations and decanting of a trust have all gained in popularity as a result of modernized trust laws, changes in family circumstances and/or a desire to change trust administration. This paper looks at some of the benefits of South Dakota's decanting, modification and reformation statutes.