Unless Congress acts, gift and estate tax exemptions will expire at the end of 2025 and the available exemption will be cut by about half, says the article “Take Advantage Of Increased Gift And Estate Tax Exclusions in 2024” from mondaq.
People worried about taxes on their estate should speak with their estate planning attorney about using this historically high exemption. Many estate planning strategies can be used to transfer wealth and take advantage of these exemptions.
In November 2023, the IRS announced increases for gift and estate tax exemptions in 2024. These increases include the federal gift, estate, and GST (Generation Skipping Tax) exemption and the annual exclusion from gift tax. These changes became effective on January 1, 2024.
The gift and estate tax exemption has increased to $13,610,000 per individual in 2024. Married couples can transfer up to $27,220,000 since both partners may utilize the exemption. This is a substantial increase of $690,000 per person ($1,380,000 per married couple) from the prior year. The GST exemption increased by the same amount to $13,610,000.
Generally, gift and estate taxes may be due if a person’s total wealth transfer during their lifetime and at their death exceeds the gift and estate tax exemption amounts.
The annual gift tax exclusion increased to $18,000 per donor for each gift recipient. Married couples can increase this to $36,000 per individual by splitting gifts between them. The annual gift tax exclusion allows individuals to make gifts to people tax-free every year without it being counted against their lifetime gift and estate tax exemption.
Unlike some states, the Missouri does not have an inheritance tax in addition to the federal tax.
Now is the time to take advantage of these high (but temporary) exemptions. Book a call with your estate planning attorney to discuss your options.
Reference: mondaq (Dec. 21, 2023) “Take Advantage Of Increased Gift And Estate Tax Exclusions in 2024”
