The new American Taxpayer Relief Act of 2012 was signed by President Obama on January 1st of this year and introduces a new transfer tax rate of 40% (gift tax, estate tax and generation-skipping transfer tax). It also permits a taxpayer to give away, during life, or at death, $ 5 million dollars which is indexed for inflation—$5,250,000 in 2013. If you have a spouse who predeceases you, who has not used the full $ 5 million, you may use your deceased spouse’s unused amount. For clients thinking of making small or sizeable gifts during life or at death, consult an experienced estate and trust attorney for your options.