Prognostications with Jonathan Blattmachr

Hosted by Children’s Legacy Advisors of St. Louis Children’s Hospital, Jonathan G. Blattmachr was in St. Louis last week to update local advisors on the new and temporary estate and gift tax rules. I was fortunate to join him for lunch before the event along with Steve Cupples, a partner with Thompson Coburn, and Jan Rogers from St. Louis Children’s Hospital Foundation.

Jonathan previewed the major topics in his presentation and he also introduced me to the blog of futurist entrepreneur, Ray Kurzweil (

Besides reminding us that intra family transfers should always be made in trust, he also opined that the administration does not intend to wait for the expiration of the temporary estate and gift tax rules to expire on December 31st, 2012. Rather he believes the administration will champion the following proposals this fall to achieve deficit reduction:

  • Reduce Estate Tax Exemption amount to $3.5 million
  • Reduce Gift Tax Exemption amount to $1 million
  • Increase Estate and Gift tax rates to 45%
  • Elimination of Lack of Control and Marketability Discounts for Holding Companies including Family Limited Partnerships and Closely Held operating businesses
  • Requirement for grantor retained annuity trust to have minimum 10 year terms

None of these ideas are new, however I am surprised by the possibility of additional radical changes to the rules as early as this fall. Any successful proposals would be effective when the bill is signed by the President.

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