Congress is at it again.  The Tax Cuts and Jobs Act of 2017 basically doubled the federal estate and gift tax exemptions.  As of January 1, 2018, the federal estate and gift tax exemption is $11.2 million. But wait, there’s more!  It is indexed for inflation.  With “portability,” a married couple can pass over $22million of wealth to their descendants free of estate and gift tax.  Of course, there is a catch.  The exemption is scheduled to return to 2017 level (indexed for inflation) as of January 1, 2026.  If you don’t use this new higher exemption by December 31, 2025, you will lose the opportunity to do so.

For high net wealth families, the next 7 years present a unique opportunity to shift very significant wealth free of federal estate and gift tax.

There are many sophisticated estate and gift tax planning strategies that can be utilized to leverage these high exemptions.  Such planning may involve lifetime gifting strategies utilizing life insurance, your first or second home, appreciating assets, such as closely held business interests, or installment notes.  By setting in motion various estate planning techniques, you can shelter tens of millions of dollars before the Tax Cuts and Jobs Act sunsets at the end of 2025. 

If you want to discuss how to take advantage of the estate and gift tax law changes in the Tax Cuts and Jobs Act, please contact one of our Trusts and Estates Attorneys about reviewing your estate plan:

David L. Dufort          ddufort@dmoc.com

Barbara S. Koteen       bkoteen@dmoc.com

Kristina E. Kelly         kkelly@dmoc.com