The federal estate tax exemption, along with many tax threshold amounts and tax brackets are inflation-adjusted. The official inflation adjustments for 2017 will not be released by the Treasury Department until late 2016, but the expected adjustments have been calculated for certain important wealth transfer numbers. These calculations are unofficial, but are based on the Consumer Price Index (CPI) for the 12 months ending August 31. It is expected that the estate and gift tax applicable exclusion will be $5,490,000 in 2017, up from $5,450,000. This also will be the adjusted number for the Generation Skipping Transfer Tax exemption.
This means the first $5.49 million of an individual’s estate will be exempt from the federal estate tax. With proper planning a married couple will be able to protect almost $11 million from federal estate taxes. However, in order for a married couple to take full advantage of doubling the exemption, proper estate planning is necessary.
It does not appear that the $14,000 annual gift tax exclusion will be increased in 2017.
If you or a loved one are in need of quality estate planning give me a call. I will take the time to get to know you, your family, your desires, your concerns, your goals, and any potential future problems. Your estate plan should be a custom designed to meet your goals. Remember, failing to plan, is planning to fail.
Paul Kellogg is an attorney in Cincinnati with the Phillips Law Firm, Inc. Paul’s practice focuses on providing comprehensive estate planning services to families and business owners, as well as providing guidance to entrepreneurs and businesses on a wide variety of transactions and disputes. He can be reached at (513) 985-2500 or via email at [email protected]