Estate and Gift Tax Planning

With the passage of the 2017 Tax Act, wealthier clients have unique and unprecedented opportunities for estate and gift tax planning that should not be overlooked.  However, the window of opportunity is short, and for this reason, you need to take advantage while you can. NDHA can assist you with this process and help you fully utilize the changes enacted as part of the 2017 Tax Act.

The most important change in the 2017 Tax Act was the increase in the estate tax exemption.  Such exemption for 2018 was raised to $11,180,000 per person. The estate tax exemption for 2019 increased to $11,400,000 per person and will increase in 2020 to $11,580,000 per person.  

However, the benefits of these substantially increased estate tax exemption amounts remain in effect only through December 31, 2025.  Beginning January 1, 2026, the amount will automatically and without further legislation by Congress be decreased to $5,000,000 per person.

Of course, there is no assurance that the increased estate tax exemption amounts will remain in effect through December 31, 2025.  Congress may reduce these amounts at any time and may reduce the estate tax exemption to an amount less than the amount in effect prior to the enactment of the 2017 Tax Act.  Consequently, it is unclear how much longer you, as a wealthy client, will have to take advantage of the provisions in the 2017 Tax Act.     

Annual gifts utilizing the annual gift tax exclusion remain an important tool for reducing the estate and should be utilized in the appropriate circumstances.  The annual gift tax exclusion for 2019 and 2020 is $15,000.