In years past, an important consideration for many taxpayers was avoiding estate taxes. Estate taxes are owed when your taxable estate (generally your net worth plus the value of any gifts in excess of the annual gift tax limit and the face value of any life insurance that you control) exceeds certain dollar thresholds.
The 2017 Tax Act, raised the estate tax limit substantially. For 2024, the limit is $13,610,000 per person and $27,220,000 per couple. If your taxable estate is above these amounts, the excess will be subject to a 40% tax. The challenge is that in 2026 the limit is scheduled to go back down to around $7,000,000 per person and $14,000,000 per couple unless Congress proactively extends the current limit.
If this reduction does occur, the number of individuals that will have to consider estate tax planning as part of the overall estate planning process will increase significantly.
For help with this process give our office a call. We are here for you.
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