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What is the unified tax credit? How does it change federal gift and estate taxes?

A tax credit can reduce or eliminate your tax obligation. One such credit is the unified tax credit, so named because federal Gift and Estate Taxes are integrated into one unified tax system. The extent of the benefit provided by the unified tax credit depends on the tax year in which you intend to use the tax credit. Recent changes in law have altered the unified tax credit, so consult with a tax attorney in order to appropriately claim it.

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The Federal Generation Skipping Transfer Tax or GST

Generation-skipping transfer (GST) tax imposed on gifts or bequests made directly to grandchildren or great-grandchildren instead of passing to the next generation. Basically, the tax skips a generation. The GST exemption amount is the same as the gift and estate tax exemption amount and is indexed for inflation.

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