New Year Estate Tax Exemption

For 2019, the IRS has announced that the lifetime estate and gift tax exemption amount has increased to $11.4 per person, or $22.8 million for a married couple. This means that an individual may pass $11.4 million in assets without facing federal estate taxes. Married couples may still pass assets to each other upon the death of one spouse free of federal estate taxes. The surviving spouse may then elect to utilize the deceased spouse’s exemption amount (called “portability”) which would allow the surviving spouse to pass up to $22.8 million in assets free of federal estate taxes.

The annual gift exclusion amount remains at $15,000 for 2019. This means that each individual can gift up to $15,000 to an unlimited number of individual recipients without cutting into their $11.4 million individual lifetime estate and gift tax exemption allowance .

Check out this 2019 estate tax update from Forbes for more information on 2019 estate taxes.

New Year, New Tax Law

You have surely heard about the new tax legislation signed into law by President Trump at the end of 2017, but what does it mean for your estate plan?  Below are a few key changes to the tax law that can impact estate planning:

  • The annual federal gift tax exemption increases to $15,000 this year, to be adjusted for inflation each year thereafter.  This means that each individual can give up to $15,000 in gifts to as many individuals as they would like in 2018 without touching their lifetime exclusion amount.
  • The lifetime gift and estate tax exclusion amount increases to $11,200,000 for each individual as of January 1, 2018, and will increase with inflation each year through 2025.  This means that each individual can pass assets worth up to $11,200,000 during life and/or at death without incurring federal gift or estate taxes.
  • The lifetime exclusion amount is still portable, meaning a deceased individual's unused portion can be utilized by a spouse.  As such, the exclusion amount for a married couple for 2018 is effectively $22,400,000.
  • On January 1, 2026, the lifetime exclusion amount will drop back to the 2017 level ($5,490,000 adjusted for inflation) per individual.
  • The federal estate tax rate remains 40% for those who exceed the lifetime exclusion amount.

 

Wishing you all the best for a happy and healthy 2018!

4 New Year's Resolutions For Married Couples

Whether you are planning a wedding this year, or you have been married for 50 years, this helpful article from A Practical Wedding outlines four major planning discussions you should have with your spouse.  Writing your wills, purchasing life insurance, preparing living wills, and documenting various aspects of life can go a long way toward making an unexpected situation much simpler for your spouse or other loved ones to manage.

Thank you for a wonderful 2016, and best wishes for a safe and happy 2017!