Legal Blog
The Weekly Scenario: Current Estate and Gift Tax Exemptions
Question: What are the current estate and gift tax exemptions and do they ‘expire’?
Answer: The Tax Cuts and Jobs Act increased the estate and gift tax exemption to $10 million per person, adjusted for inflation. Under this regime, the exemption available to each American taxpayer in 2019 is $11.4 million. The increased exemption amounts are scheduled to cease at the end of the year 2025
As the presidential campaign gets rolling, high profile candidates are providing clues regarding their own plans. For example, Bernie Sanders and Elizabeth Warren have each unveiled tax plans that focus on taxing very wealthy Americans.
Bernie Sanders’ proposal would reduce the estate tax exemption to $3.5 million and the gift tax exemption to $1 million, which are the same amounts that were available in 2009. Sanders’ plan would also apply a top estate tax rate of 77% for estates valued in excess of $1 billion. An estate valued at between $3.5 and $10 million would be taxed at 45% rather than the current 40%.
Elizabeth Warren would impose an annual “wealth tax” on families with assets exceeding $50 million in value. This proposal does not directly affect the estate tax per se, it is an approach that is similar to Sanders’ proposal in terms of a tax on the very wealthy.
Comment: For advisors who work with high net worth clients, it may be a good idea to consider planning opportunities afforded by these high tax exemptions.
As always, if you have any questions or would like to learn more, please contact Steve Shane at sshane@offitkurman.com or .
ABOUT STEVE SHANE
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the mid-Atlantic region. With over 185 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients along the I95 corridor in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect. Find out why Offit Kurman is The Better Way to protect your business, your assets and your family by connecting via our Blog, Facebook, Twitter, Instagram, YouTube, and LinkedIn pages. You can also sign up to receive LawMatters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.
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