The IRS recently released the details surrounding any changes in the gift or estate tax exemptions. While the gift tax will stay the same, enabling you to pass on up to $15,000 per year per person without triggering any additional taxes, there has been an increase in estate tax limits. The estate tax exemption has increased to $11.4 million per individual and $22.8 million per married couple.
This means that you can pass on as much as $11.4 million to heirs and not pay any gift or federal or state tax; whereas a married couple can shield double that. There are numerous planning opportunities present for the extremely wealthy and even if you do not currently have an estate that triggers the federal estate tax, you’ll still need an estate plan to determine how your assets will be passed on after you pass away and what to do in the event of becoming incapacitated.
Many people think of estate planning as only related to what will happen to their belongings when they pass away, but estate planning encompasses a bigger picture including incapacity and disability planning, the establishment of powers of attorney for who is eligible to step in and make decisions on your behalf if you become unable to do so, long-term planning for gifting to charity and the people you value most, and even asset protection planning as your wealth grows.
Having an established relationship with an experienced estate planning attorney is the first step in accomplishing all of these goals.