Last week I received this estate tax and planning brief from Brett Kaufman. He is an attorney at Schlossberg, LLC in Braintree. I thought it was well written and covered the recent developments in the estate tax law and new planning opportunites. With Brett's permission, I have reprinted it here:

"On December 17, 2010, President Obama signed into law, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 'Tax Relief Act'), settling some major questions about the federal estate, gift, and generation-skipping transfer tax law until December 31, 2012.

The Tax Relief Act makes the following changes to the federal estate and gift tax system:

- Estate Tax. The estate tax has returned with a larger exemption of $5 million and a lower tax rate of 35%.

- Gift Tax. The estate and gift tax exemption now are reunified, so that everyone now has a lifetime gift exclusion amount of $5 million per person and a 35% gift tax rate for gifts over $5 million.

- Exemption Portability Between Spouses: The Act provides for "portability" between spouses resulting in a maximum exemption of $10 million ($5 million per spouse) for a married couple. Portability allows a surviving spouse to elect to take advantage of the unused portion of the estate tax exemption of his or her predeceased spouse, thereby providing the surviving spouse with a larger exemption amount on their death. However, such portability is assured only for two years and the availability of this portable exemption amount requires an election to be made on a timely filed federal estate tax return.

- Generation Skipping Tax (GST). For transfers made in 2011, the GST exemption is $5 million, indexed for inflation beginning in 2012. The GST tax rate for 2011 and 2012 will be at a 35% tax rate.