Estate Tax Update

The Estate Tax rate, as of 2023, is 40% on assets transferred after death. This is a tax on the transfer of assets. While the Estate Tax rate is high, it does not apply to the majority of estates. The annual gift tax exclusion in 2023 is now $17,000 per person.

Currently, there is an Estate Tax exemption of $12.92 million per individual. If there is less than the exemption amount in assets at the time of death, there would be no Estate Tax due.

If married, it is possible to transfer an individual exemption upon death. This is known as “Portability” and enables a married couple to transfer over $25 million ($25,840,000) without paying Estate Tax.

The SECURE Act also changed the distribution of retirement assets upon death. We have prepared a summary of this legal change to retirement accounts distributed at death. Clients may also be interested in using a Spousal Lifetime Access Trust (SLAT), Grantor Retained Annuity Trust (GRAT), or Sales to Intentionally Defective Grantor Trust (IDGT).

For questions on asset protection, estate planning, probate, or trust administration, feel free to contact, Elliott Stapleton to schedule an initial consultation.

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