Estate Measure Opens Window to Give Kids $10 Million

Families would be able to make tax-free gifts to their children or others of as much as $10 million, an increase from the current limit of $2 million, under the tax-cut bill Congress is debating this week.

Beginning in 2011, an individual U.S. taxpayer’s lifetime gift-tax exclusion will jump to $5 million, up from $1 million currently, according to the legislation. Gifts from living parents allow taxpayers to transfer assets such as cash, stocks or shares of a business to their kids and let the value grow outside of the couple’s estate, said Jim Cundiff, an estate planning attorney with McDermott Will & Emery, who’s based in Chicago. Unifying the estate and gift tax exemptions is one of the biggest benefits in the measure, he said.