The Tax Cuts and Jobs Act, which took effect on January 1, 2018, increased the federal estate, gift, and generation-skipping transfer (“GST”) tax exemption amounts to nearly $11.2 million for an individual, and $22.4 million for a married couple, from $5.49 million and $10.98 million, respectively, in 2017. These exemption amounts are scheduled to increase with inflation each year until 2025. On January 1, 2026, the exemption amounts are scheduled to revert to the 2017 levels, adjusted for inflation. The highest marginal federal estate and gift tax rates remain at 40%, and the GST tax rate remains a flat 40%.

“Portability” of a deceased spouse’s unused exclusion amount is available to a surviving spouse, meaning spouses with a combined estate of up to $22.4 million in value at the time of the survivor’s death will not pay estate tax with the proper planning and estate tax return elections. The exclusion amount is adjusted each year for inflation.

Also beginning January 1, 2018, the annual gift tax exclusion increased to $15,000 from $14,000 (a married couple may make gifts of $30,000 per recipient). This change was due to inflation, and future inflationary adjustments should be expected.

The above article is an excerpt from Estate Planning in Arizona: What You Need to Know, 2nd Edition (Wheatmark, 2019), by Donald A. Loose, republished with the author’s permission.

Disclaimer: Laws change constantly. Specific legal advice should be obtained regarding any legal matter. The information contained on this website does not constitute legal advice and no attorney-client relationship is created. 

Have any questions about this topic?
We’re ready to listen.

Related Content

7 Reasons to Update Your Estate Plan

Your estate plan is not a “set-and-forget” kind of strategy. There are certain life events and circumstances that warrant your updating this important set of documents.

Why You Need an Estate Plan

Planning for our own death is not something that tends to thrill most of us. It is difficult to face our own mortality.

What is Estate Planning?

What comes to mind when you see the words estate planning?

Informal Probate – Administration of Estates Outside of Court

In many cases, probate is a quick and efficient way to transfer the assets of a person who has died (the “decedent”) to his heirs. About 10,000 probate cases are filed each year in the state of Arizona.

Special Purpose Trusts – 2 Most Common Forms

A trust is a legal entity that is created and holds title to assets during the life of the person who places assets inside the trust

Explore All Articles by Practice Area:
Don Loose