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In September, I wrote a blog about estate planning for 2024. Since then, we have some new information about estate planning in 2024, specifically the changes in annual gift limits and estate tax exemptions. While these numbers are estimates, they are considered to be reliable based on inflation. The IRS is expected to confirm these numbers shortly.
The 2024 gifting annual exclusion is estimated to be $18,000 per person per year. That number is an increase on the 2023 gifting annual exclusion amount which is currently $17,000 per person ($34,000 per couple) per year. This means that a person can gift someone $18,000 in 2024 ($19,000 in 2025) without there being any gift tax implications.
The 2024 gift and estate tax exemption is estimated to be $13,610,000. That number has increased from the 2023 gift and estate tax exemption of $12,920,000. This means that you can gift more than $13.6 million of assets to someone without there being any gift tax implications. In addition, if you pass away in 2024 without having used any of this exemption, there will not be any estate taxes for your family to pay as well.
Please note that this gift and estate tax exemption is scheduled to be reduced in 2026. That reduced amount is estimated to be between $6 million and $6,500,000. During the Trump presidency, the gift and estate tax exemptions were increased to $10 million and have increased due to inflation. However, there were not enough votes in Congress to make this gift and estate tax exemption increase permanent. Thus, the reason for the above reduction in 2026. Therefore, if your assets may exceed those numbers, you should consider contacting my office to discuss various options which could potentially save your family significant estate taxes in the future.
For 2024 (and currently) there is not a limit on the amount of assets you can gift to a spouse who is a U.S. citizen. The 2023 limit on the amount you can gift to a spouse who is not a U.S. citizen is $175,000. The 2024 limit on the amount that you can gift to a spouse who is not a U.S. citizen is estimated to be $185,000.
If you need an estate plan or maybe just want to update one prepared years ago, please visit our website at www.joebartonlaw.com or call us at 415-235-9162. You will be glad you did!