Estate Tax Changes
Estate planning is an essential part of planning for your loved ones after you’re gone. Under the new tax law, there are some changes to be aware of, such as the estate tax threshold. One specific part worth noting, is that all the provisions surrounding the change in estate tax will revert back to their previous thresholds in 2025.
The first part to notice is that the estate tax threshold has been raised to $11.18 million per person, or $23.36 million for a married couple. Both of these numbers are significant increase over prior limits. Additionally, this eliminates any federal estate taxes on amounts under the threshold for property gifted to heirs during your lifetime or after your death.
Something to take into account though is that some states have implemented their own estate tax, for which the tax rate may vary.
District of Columbia
Furthermore, with the increased limits, lifetime gifts of estate assets can be made for many individuals without concern of triggering taxation limits later on. The new limits have created an environment where estate taxes will likely only affect the extremely wealthy, but it is still important to plan accordingly. If you have questions about estate planning, contact us at the Center for Financial, Legal & Tax Planning, Inc.