microphone

Channel WCN

The Latest in Law

Anticipated Changes Affecting Estate Planning & Gifting

by

Effective January 1, 2023, both the Lifetime Federal Estate and Gift Tax Exemption and Annual Gift Tax Exclusion Amounts are expected to increase. This change presents an opportunity to capitalize on the historically high Estate and Gift Tax Exemption amounts and to transfer wealth (outright or in trust) without a transfer tax. As presented below, it is anticipated that an individual will be able to gift an additional $860,000 and a married couple will be able to gift an additional $1.72MM. These gifts avoid a transfer tax not only on the amount gifted, but also on the future appreciation of those assets.

With effective estate planning and gifting strategies, you and your family can transfer wealth while avoiding tax liability.

Effective annual gifting is important as annual gifts below the exclusion amount do not reduce a taxpayer’s Federal Estate and Gift Tax Exemption.

Comparison of Federal Estate and Gift Tax Exemptions and Annual Gift Tax Exclusions

2022 and Anticipated Changes Effective January 1, 2023

 2022 Amounts2023 AmountsIncrease
Federal Estate and Gift Tax Exemption – Individual$12,060,000$12,920,000$860,000
Federal Estate and Gift Tax Exemption – Married Couples$24,120,000$25,840,000$1,720,000
Annual Gift Tax Exclusion (per donee)$16,000$17,000$1,000

The Tax Cuts and Jobs Act (TCJA) is set to sunset at the end of 2025 so, at this time, there is a limited window to implement an effective estate planning strategy leveraging the announced exemption levels. Contact our trust and estate planning attorneys in the Private Client Services practice to discuss these expected changes.   

Channel WCN Posts