2017 Estate and Gift Tax Update

The Estate and Gift Tax law changes for 2017 are not as drastic as previous years. The federal estate tax exemption, an amount that an individual can leave to heirs without having to pay federal estate tax, increased to $5,490,000 and a 40% top federal estate tax rate.

The gift tax annual exclusion amount per donee remains at $14,000 for gifts made by an individual and $28,000 for gifts made by a married couple who agree to “split” their gifts.

The concept of “portability” is still a valuable tool Estate Planners use with spouses. If both you and your spouse die, your surviving spouse can leave $10,980,000 estate tax free without complex estate planning. This is because your $5,490,000 exclusion amount is “portable”, which means that your surviving spouse can use any unused portion of your exclusion amount in addition to the survivor’s own $5,490,000 exclusion amount. In order to get this benefit, an estate tax return must be filed on the first death in order to elect “portability” of your exclusion amount.

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