Pending Estate Tax Reform Legislation -- Act Now to Implement Sales of Family Business Interests and GRATs

August 2, 2010

By Richard S. Franklin

Senator Bernard Sanders (I-VT) introduced on June 24, 2010 the Responsible Estate Tax Act (S. 3533) (the "Sanders Bill"). This legislation is important for two reasons: it is a comprehensive effort to reform the current broken estate tax system and it reiterates the likely curtailment of two valuable estate planning strategies currently available. Consider the Sanders Bill as a warning shot that (i) application of large valuation discounts to gifts or sales of interests in family controlled businesses and (ii) the ability to implement short-term 2-year GRATs have entered into the home stretch.

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