Broker Check

3 Tax Exemptions You Don’t Want to Miss

September 27, 2023

While investments and savings are core to your financial plan, ensuring your estate plan is tax-optimized means keeping more of the wealth you are building. Currently, it’s a relatively favorable environment for estate taxes, but tax rates can, and likely will change, which means it’s important for you to be aware of the implications changes could have on your ability to optimize exemptions. 

The most significant is the current estate tax exemption which has more than doubled to $12,060,000 and is up for renewal in 2026. If Congress does not extend the Tax Cuts and Jobs Act (TCJA), it could go back to $5,000,00 which means smaller estates are subject to taxes. 

This is a good time to review three important tax exemptions that you may want to consider if you haven’t already.

  • Estate Tax Exemption: Current exemption amount is $12,060,000
  • Gifting Exemption: The annual exclusion amount is $16,000 per recipient for individuals or $32,000 for married couples
  • Generation-Skipping Exemption: Applies to property transferred to a generation that is two or more levels below

Estate planning is never a “one and done” exercise. Laws, regulations, and, most importantly, personal circumstances change, and each could impact even the most well-crafted estate strategy. Reviewing your estate plan at least once every five years, as well as whenever you have a significant life event, is extremely important.

I am always available to sit down and go through your plan to help you adjust as needed. I’d also be happy to sit with you and your CPA to make sure your estate is designed to take advantage of the all-time high estate, gift tax, and generation-skipping transfer exemption amounts.

Give me a call or send me an email and we can set up a time to have this important discussion.


All the best.




Sources:

Estate Tax Exemption, 2022 Definition (investopedia.com)

Estate Planning Updates to Consider for 2022 (cbiz.com)

Estate Tax Planning - Wyatt & Butterfield, LLC (mkwyatt.com)

Estate and Inheritance Taxes by State in 2021 | The Motley Fool