Don't hold your breathe that the White House and Congress will come to the rescue in the nick of time.
As a recent MarketWatch article sums it up, there's "No playing chicken with estate tax deadline." The present estate planning laws offer an unprecedented and generous gift tax exclusion. That is worth thinking about, too. The exclusion amount of the estate tax is tied to the gift tax amount and is therefore just as generous (but not many taxpayers are keen to qualify for that before year's end).
Gifts, on the other hand, are easy to make. This especially is true as the holiday season is nearly upon us. With the current exclusion set to $5.12 million, you can give that much in your lifetime over and above the annual exclusion amount of some $13,000. Better yet, you can give this entire amount before December 31, if you so choose to secure the full exclusion amount. Why? Because the exclusion is automatically set to drop to $1 million unless the White House and Congress take action.
Overly cautious taxpayers may miss out on this wealth transfer bonanza to the tune of some $4.12 million that otherwise could have passed to their loved ones gift tax-free.
Reference: MarketWatch (October 2, 2012) "No playing chicken with estate tax deadline"