New Year, new numbers… The estate and gift tax exclusion amounts will increase with the New Year. Individuals who have assets in excess of the exclusion amounts should consider creating a plan to eliminate or reduce estate and gift taxes. For someone who dies in 2024, the numbers are as follows:
- The federal estate and gift tax increased to $13,610,000 per person for 2024. This means that in 2024 a person can gift up to that amount during their life, or after death, free of federal estate and gift tax. Any exemption amount not used by an individual can, with proper planning, be transferred and used by a surviving spouse. The Federal legislation allowing these large exemptions sunsets at the end of 2025. It is uncertain whether new legislation will be enacted to continue the larger exemptions or whether the exemption will revert to amounts similar to the current New York State estate tax exemption.
- The New York State estate tax exemption amount is increased to $6,940,000 per person for 2024. While there is no New York State gift tax, if an individual who made gifts dies within three years of making the gift, the gifted amount is added back into the estate and is included when determining if there is New York estate tax owed.
- In 2024, the annual federal gift tax exclusion is raised to $18,000. This means that you can gift up to $18,000 per person, per year, tax free and no gift tax return needs to be filed in connection with the gift. Keep in mind however, if your estate is more modest than $6,940,000 no gift or estate tax will ever be due. Kids love annual gifts, and you may love giving these gifts, but often they provide no tax savings (although they result in many hugs and kisses).
Remember – the increased federal estate and gift tax exclusion amounts may shrink in the near future. If you have funds in excess of the New York exemption amount, now is a great time to look into incorporating lifetime gifting strategies into your estate plan.
If your estate is close to these thresholds, there are many ways to plan. We are here to help you find a strategy that will fit your particular situation. Call or email us so we can help!
The information provided herein does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available here are for general informational purposes only.