Now that the election is over and the holidays have begun, taxes and the impending fiscal cliff are on everyone’s mind. While you may not be able to do anything to force Congress into action, you can take steps to fix your own will or trust and capitalize on existing gift tax exemptions before they expire.

It can’t be said enough how important it is to act now to take advantage of current estate and gift tax laws that are set to expire at the end of the year. Though delay is common when it comes to estate planning, there’s only a very limited window left to act before the fiscal cliff leads to unimagined changes to the tax code. 

Currently, legislators have created a $5,120,000 exemption for both gift and estate taxes that will remain in place only until the end of 2012. That number drops tremendously, to only $1 million, once the New Year rolls around. That means that right now Congress has said individuals have a free pass to give away up to $5,120,000 (or $10,240,000 for a married couple) without tax penalties.

Though it’s too soon to know for sure what will happen, it is quite possible that such a large exemption may never come around again. It’s important to realize that gift giving can be highly customized depending on your wishes. Giving away property such as real estate can allow for additional appreciate to escape the estate tax. Using trusts and LCCs are ways to ensure that you give assets away while maintaining some control so gifts aren’t squandered by your loved ones.

Even if you’ve never done much estate planning before, consider this a good time to start. The future is unknown but the remainder of 2012 will be a gift-giving bargain. If you have substantial assets and have always thought you’d give some away, now may be the best time to take the plunge. Consult an experienced Alabama estate-planning attorney now before it’s too late.

Whether you have few assets or a multi-million dollar estate, you need to have an effective estate plan. If you have questions or concerns contact the Huntsville wills and estates attorneys at Martinson & Beason, P.C. today.

Source: “Grab The $5M Gift And Estate Tax Perk: It’s Gone In 2013,” by Robert Wood, published at Forbes.com.