Estate Tax Mitigation Planning

The combination of the current enhanced federal estate, gift, and generation-skipping transfer tax exemption and the current economic situation with possibly depressed asset values and reasonable interest rates, provides unprecedented estate planning opportunities for high net worth individuals.

The Tax Cuts and Jobs Act of 2017 increased the gift, estate, and GST exemptions per individual from $5 million (indexed for inflation) to $10 million (indexed for inflation). For 2023, the exemption is $12,920,000 per individual. The maximum tax rate remains at 40% for transfers exceeding these exemption amounts.

This means that the client will get the benefit of making gifts up to $12,920,000 (2023) and any inflation adjusted amounts in the next four years even if the estate and GST tax exemptions are less at their death. Because Congress may reduce the exemption before 2026, clients may want to consider making gifts NOW to use the exemption, rather than waiting.

* Representatives do not provide tax and/or legal advice. Any discussion of taxes is for general informational purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.