Preface

• Author: Jerold I. Horn
• Profession: Lawyer
• Pages: 35-37

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Change and uncertainty are the only constants in the planning of estates. Changes of all

sorts, in statutes, interpretations, procedures, reactions, and circumstances, beget one

another with startling and even increasing frequency. The mere solving of new problems

as they occur is not sufcient. Many of the changes, and of the problems that they pres-

ent, will occur long after a governing instrument irrevocably is in place. Removal and

relaxation of limitations upon durations of trusts accentuate this effect. Any real solution

requires a change in mindset, from a focus solely upon ad hoc responses to ad hoc prob-

lems to a focus additionally upon something much broader and less transient: exibility.

The sixth edition confronts what apparently is a new period of instability. The new

instability follows a relatively short lull after a period of unprecedented instability. Dur-

ing June of 2001, Congress enacted the Economic Growth and Tax Relief Reconciliation

Act of 2001 (EGTRRA). EGTRRA provided for phased increases of exemptions, phased

reductions of rates, the repeal in 2010 (more than eight years later) of the estate tax and

the generation-skipping tax, and the reversion (known as the sunset of EGTRRA), one

year later in 2011, of the taxes, the exemptions, and the rates to status quo ante. The

repeal was effective January 1, 2010. Legislation that became effective on December

17, 2010, aborted the repeal of the estate tax, but with an increased exemption and a

reduced rate, on an elective basis for 2010. The legislation restored the estate tax and the

generation-skipping tax as of the beginning of 2011. Also, the legislation reduced rates

and increased exemptions for the gift tax, the estate tax, and the generation- skipping

tax. Further, the legislation deferred until the beginning of 2013 the reversion of the

exemptions and rates that were in effect before the advent of EGTRRA, and it simul-

taneously enacted for 2011 and 2012 a system of portability of the unused portion of

the estate tax exemption of a predeceasing spouse and provided for it to sunset at the

end of 2012.

The American Taxpayer Relief Act of 2012 became law on January 2, 2013. It included

a $5 million exemption, indexed for ination, for the estate and gift taxes, a $5 million

exemption, indexed for ination, for the generation-skipping tax, and a system of por-

tability for the unused portion of the estate tax exemption of a predeceasing spouse.

President Donald J. Trump has proposed the repeal of the estate tax and the

generation-skipping transfer tax. However, what would happen to the gift tax and adjust-

ments to bases for income tax purposes remains unclear.

Preface