The ponderously named Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act, signed into law last December by President Barack Obama, brought good news to generous millionaires — and the larger population of nonmillionaires in this country — who have giving on their minds.

The act, set to expire at the end of next year, has unified the estate and gift tax exemptions, allowing everyone a lifetime gift exclusion of $5 million or $10 million for married couples. Anything beyond is subject to a 35 percent tax rate, which is down from the previous 55 percent rate.

Now most Americans will be able to give away all of their assets, either during their lifetime or after death, without paying a nickel in federal gift or estate taxes, and that goes for the heirs too.

The estate tax exemption was raised to $3.5 million in 2009, but until the new law went into effect, the lifetime gift tax exemption was stuck at $1 million. It made more sense for individuals to wait until they died to give away their money. Now they can gift heirs while living.

“But if Congress doesn’t pass another law by Jan. 1, 2013, the gift tax exclusion will drop back to $1 million,” says Sacramento attorney Timothy Murphy, who specializes in estate planning and elder law.

“The way the law is written, lawyers are now talking about something called the clawback, which means you may end up getting taxed on gifts you thought were going to be tax-free because the gift tax exclusion won’t apply in the years afterward. Now, is that going to happen? I have no idea, nor does anybody else. It’ll literally take an act of Congress to determine.”

Murphy knows of no one who has adjusted his or her gift-giving strategy as a result of the tax relief act. “I think most cautious practitioners aren’t getting too excited about this new $5 million ‘coupon’ because it only lasts two years, so we tell clients, ‘This may work, and, again, maybe it won’t.’”

Gold River financial planner Steve Raymond says the lifetime gift tax exclusion isn’t for everyone.

“I don’t say a blanket yes to anything,” Raymond says. “You have to not only understand a person’s goals but the texture of how everything works together in their lives. If it makes sense — leaving that kind of money to certain people and taking care of it now, and having the resources to fund whatever else they want to accomplish — then absolutely start talking to an estate planning attorney to get that set up.”

More relevant to the average taxpayer, however, is the $13,000 annual gift exclusion, which is up from the previous $10,000 tax-free limit. Now, an individual can give $13,000 per person per year to as many people as they want, without paying taxes. Married couples can give a combined $26,000.

— Dixie Reid