Under current gift tax law, any individual may make a gift of up to $5.12 million this year to the individual’s children, grandchildren and other beneficiaries without paying gift tax. Any gift in excess of that amount is taxed at a historically-low 35%. Unless Congress acts to extend (in whole or part) this benefit, created under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, the gift exemption will decrease to $1 million on January 1, 2013. Any gift in excess of $1 million will thereafter be taxed at up to 55%. Fund managers and other financial services professionals who have significant estates should consult their tax and estate planning professionals immediately to take advantage of this enormous opportunity. Many fund managers are making gifts of carried interests to “dynasty trusts” created in states that permit trusts to continue in perpetuity, where the gift may be held for the benefit of future generations without being reduced by estate or other transfer taxes at each generation. Pillsbury’s latest Advisory addresses this topic in detail; you can find the Advisory at www.pillsburylaw.com/publications.