What’s New in Estate Planning?
On behalf of David Whitlock at Whitlock Canter LLC
New Jersey Estate Taxes Repealed in 2018!
In October 2016 the law was changed to repeal New Jersey Estate Taxes effective 1/01/18. For the remainder of 2016 the exemption remained at $675,000 and for deaths in 2017 the exemption was $2 million. The New Jersey Inheritance Tax was not changed and remains in effect.
Federal Estate Taxes
The Federal Estate Tax Exemption is $12.92 million for deaths in 2023 and is indexed for inflation. On January 1, 2026 the federal estate tax exemption (as indexed for inflation) will be cut in half unless further legislation is passed. This largely depends on which political party is control at that time. Unless the law is changed, it is expected that many taxpayers with estates larger than $6 million will consider making larger gifts prior to January 1, 2026 before a portion of their unused exemption is reduced. Those taxpayers are urged to begin planning in the Spring of 2025.
Federal Gift Tax Annual Exclusion
Beginning on January 1, 2023 the annual gift tax exclusion was increased to $17,000, The federal gift tax exclusion is the amount which can be given without using any gift tax exemption