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A shrinking estate tax exemption?

On Behalf of | Aug 28, 2020 | Estate Planning

2017 ushered in an era of massive tax cuts, including a close to $12 million individual exemption.  However, now, with an economy reeling, exploding government deficits, and political winds suggesting a changing regime federally, we need to concern ourselves with the prospect that the estate tax exemption may drop to as low as $3.5 million, as proposed by many members of Congress.

The IRS has said that if you use your exemption now by gifting it (or some portion of it) away, they will not later penalize you should the exemption later dip below the amount you gifted.  So, if affordable, it would be prudent to implement your gifting strategy before the makeup of leaders in Washington changes, as the pollsters and pundits are predicting.

There are many tried and true techniques which mitigate the obvious concerns we may have about gifting.  Please call Gil, John, or Adam at 973-834-3820 if you would like to discuss this further.  Alternatively, you may email us at [email protected].