This week, the Daily Tax Report, published by Bloomberg BNA, noted that, in 2012, taxpayers gifted $122 billion to family members, which was four times greater than the amount transferred in each of the prior two years. $84 billion came from fewer than 30,000 people, as the very wealthy rushed to take advantage of a favorable estate and gift tax law prior to its expected expiration on December 31, 2012.

What was so favorable in 2012? A taxpayer could gift $5 million during his lifetime without paying gift tax ($10 million for a married couple). This amount was expected to be reduced to only $1 million in 2013. As a pleasant surprise, Congress and the President not only maintained the $5 million exemption amount, but also indexed it for inflation so that the current amount is $5,340,000 per person.

What does this mean for most Americans with assets less than $5,340,000? It means a husband and wife can transfer to their children, or any beneficiaries of their choice, up to $10,680,000 without worrying about estate tax. Thus, for most, there is no tax reason to gift. With proper planning, you can pass your estate tax free upon your death, and hold on to your assets during your lifetime. For those fortunate Americans who are above $10,680,000, there are still planning opportunities available. It is a good bet, however, that there will never be a flood of gift tax returns filed again similar to what happened in 2012.