Historic Estate and Gift Tax Limits for 2024
Estate and Gift Tax Limits Will Hit Historical Highs Next Year
The annual estate and gift tax exemption in 2024 is $13.61 million per individual, representing an increase due to inflation from the 2023 exemption of $12.92 million. This means that a married couple can now pass on to others during their lifetime or at death a total of $27.22 million without incurring gift or estate tax (in addition to using their annual gift tax exclusion amount to pass along additional gifts each year, described below). For an individual that already maxed out their lifetime gifts in 2023, they can now gift another $690,000 this year, or a couple can give away another $1.38 million.
Absent any legislative action on estate taxes, current laws provide that the estate and gift tax exemption amount will be significantly reduced after December 31, 2025, when the exemption amount is set to revert back to $5 million indexed for inflation. This inflation-adjusted amount is currently estimated to be in excess of $6 million.
The annual gift tax exclusion amount is also increasing in 2024 to $18,000 per year, representing an increase from the 2023 amount of $17,000. This means that a married couple can now gift up to $36,000 per recipient this year without incurring gift tax, thereby removing the assets from the donor’s taxable estates and allowing the assets to appreciate in the recipient’s estate.
Please contact us if you wish to schedule a consultation to discuss the impact of any of these changes on your estate plan. Also please keep in mind our upcoming sabbatical schedule, discussed below.