James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Fiscal Cliff Deal Has Various Estate Tax Implications
Author: James F. McDonough
Date: January 9, 2013
Key Contacts
Back
With the fiscal cliff avoided and new capital gains and estate tax laws implemented by the federal government, changes are abound for taxpayers in all earning ranges, though the wealthiest earners will see arguably the most substantial losses from the legislation passage.
Due to the passage of the American Taxpayer Relief Act (ATRA), high-net earners will see their dividends and capital gains taxes rise from 15 to 20 percent beginning this year. Moreover, while the law will keep the federal estate tax exemption at $5 million, the top tax rate of 35 percent will jump to 40 percent.
Though the estate tax is likely to affect many high-earners and business owners, a finance expert indicated ATRA will ultimately help the overwhelming majority of Americans.
“You could say this eliminates the estate tax for 99 percent of the population, though I’ve seen figures that say 99.7 or 99.8,” former Internal Revenue Service inspector Richard A. Behrendt told the New York Times.
He added that in terms of policy, the estate tax increase was implemented for a small segment of high-earning Americans – those inside the top 1 percent of earning nationwide. Trusts and other tax vehicles can also further reduce their liabilities.
One concern another finance expert, Carol G. Kroch, a managing director for wealth and philanthropic planning at Wilmington Trust, has regarding the passage of ATRA is that some high-net earners may avoid some financial planning ideas due to the tax law changes. However, she noted many of these individuals “can still create that pool of wealth” via trusts, despite the estate tax increase.
- Practices: Tax and Trusts & Estates, Estate & Trust Litigation, Real Property Tax Strategies
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
Author: Dan Brecher
Common Legal Mistakes NYC and New Jersey Business Owners Make
Operating a business in the New Jersey and New York City metropolitan region offers incredible opportunities, but it also requires navigating a dense and highly regulated legal environment. From entity formation to regulatory compliance, seemingly minor legal oversights can expose business owners to significant risk. In our work with businesses throughout the region, our attorneys […]
Author: Dan Brecher
What Founders Can Learn From Start-up Suits
High-profile founder litigation is more than just a media spectacle. For startup founders, these cases underscore the legal and structural risks that can arise when rapid growth outpaces formal oversight. While launching a new company can be both an exciting and deeply rewarding endeavor, founders must be mindful that it also comes with significant risks. […]
Author: Dan Brecher
Corporate Governance Reviews: A Practical Guide for New Jersey Companies
Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]
Author: Ken Hollenbeck
What to Do After Being Served with a Lawsuit: Steps to Protect Your Legal Rights
Being served with a lawsuit is one of the most stressful legal events a business or individual can face. Whether the claim involves a contract dispute, an employment matter, an intellectual property issue, or another legal challenge, the actions you take in the first few days can significantly shape the outcome of your case. Acting […]
Author: Robert E. Levy
Will 2026 Be a Banner Year for SPACs? Understanding the Risks and Opportunities
Special Purpose Acquisition Companies (SPACs) continue to gain momentum as we move through 2026. After enduring a significant contraction following the 2021 boom and the regulatory scrutiny that followed, SPAC activity rebounded sharply in 2025 and now carries forward into 2026 with real momentum. The SPAC resurgence reflects broader improvements in both market conditions and the […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.