The amount that can pass estate tax free has increased to $13.61 million per person. A married couple with the appropriate language in their trust can pass twice that amount. The annual gift tax exclusion has also increased and is now $18,000 per recipient per year.
However, the current federal law will “sunset” at the end of 2025. If Congress does not extend the law, the amount that can pass estate tax free could decrease to just over $6 million per person or $12 million per couple with the appropriate estate planning documents. For estates larger than that amount, there may be helpful planning available and such planning should be assessed this year or next.
The new federal exclusion does not change the need for a trust to avoid probate. A trust is still very helpful to limit administration expenses, provide for minors and for the smooth transition of corporate stock and LLC ownership.
By Sharon D. Ravenscroft, Esq., handling matters of estate planning to protect access to assets if a person becomes sick or incapacitated or upon death.