From a federal gift, estate and generation-skipping tax (GST) perspective, there is what we know, and what we don't know. We know that the current, generous federal estate, gift and GST framework gives each individual the ability to transfer $5.12 million in assets to certain descendants, including children, grandchildren and more remote generations, free from federal estate, gift and GST taxes. We also know that these historically high exemptions expire Jan. 1, 2013. On that date, the $5.12 million exemption drops to $1 Million, with any amount above that exemption being taxed at the much higher 55 percent tax rate, when compared to the current rate of 35 percent applied to amounts above the current $5.12 million exemption.
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Federal and State Estate, Gift and GST Exemptions and Rates:
| Federal Taxes | Estate, Gift & GST Exemption and Tax Rates | |
| 2012 | $5.12 Million Exemption, 35% Tax Rate | |
| 2013 | $1 Million Exemption, 55% Tax Rate | |
| Minnesota Taxes | Estate Tax Exemption and Tax Rates | Gift & GST Taxes |
| 2012 | $1 Million Exemption, ~10% Tax Rate | N/A |
| 2013 | Currently, no state changes planned | N/A |
| Indiana Taxes | Inheritance Tax Exemption and Tax Rates | Gift & GST Taxes |
| 2012 | Both exemption and tax rates vary according to relationship of beneficiary to decedent | N/A |
| 2013 | Varies. Indiana inheritance tax being phased out over the next 10 years. | N/A |
| Illinois Taxes | Estate Tax Exemption and Tax Rates | Gift & GST Taxes |
| 2012 | $3.5 Million Exemption – 5.6 - 16% Rate | N/A |
| 2013 | $4 Million Exemption – 5.6 - 16% Rate | N/A |
| Georgia Taxes | Estate Tax Exemption and Top Tax Rate | Gift & GST Taxes |
| 2012 | N/A | N/A |
| 2013 | N/A | N/A |
| Ohio Taxes | Estate Tax Exemption and Top Tax Rate | Gift & GST Taxes |
| 2012 | $383,333 Exemption, 7% Top Tax Rate | |
| 2013 | As of January 1, 2013, there will be no estate tax assessed in Ohio. | |
| Washington, D.C. Taxes | Estate Tax Exemption and Top Tax Rate | Gift & GST Taxes |
| 2012 | $1 Million, 19% Top Tax Rate | |
| 2013 | $1 Million, 19% Top Tax Rate | |
| California Taxes | Estate Tax Exemption and Top Tax Rate | Gift & GST Taxes |
| 2012 | N/A | N/A |
| 2013 | State Level Pick-Up Tax, Unless California Legislature Passes Legislation by Dec. 31, 2012 to Eliminate the 2013 Tax | State Level Pick-Up Tax, Unless California Legislature Passes Legislation by Dec. 31, 2012 to Eliminate the 2012 Tax |
| Michigan | Estate Tax Exemption and Top Tax Rate | Gift & GST Taxes |
| 2012 | N/A | N/A |
| 2013 | State Level Pick-Up Tax, Unless Michigan Legislature Passes Legislation by Dec. 31, 2012 to Eliminate the 2013 Tax |