With the recent passage of tax legislation, significant changes have occurred to the wealth transfer tax system. Effective January 1, 2019, federal, estate, gift and generation-skipping transfer tax exclusion amounts have increased to $11.4 million for individuals, and to $22.8 million for married couples. Unless further legislation is adopted, the exemption amounts are scheduled to revert on January 1, 2026 to 2017 levels, adjusted for inflation. Federal, estate and gift tax rates will remain at the highest marginal rate of 40%. We recommend you consider this significant opportunity for estate planning, including a review of past gifting and the possibility of making future gifts.

The amount a person may give annually to each individual as he or she may desire, without using any of the gift tax exemption amount, increased to $15,000 in 2018. For example, a married couple may now make gifts of the annual exclusion amount of up to a total of $30,000 to an unlimited number of recipients. In addition to making outright gifts, multiple options exist for gifting, including college savings accounts, Uniform Transfers to Minor Accounts, and certain types of Trusts designed to assist in the maintenance of such assets. Further gifting opportunities are available, including an unlimited gift tax exclusion for sums paid on behalf of an individual directly to educational institutions for tuition and directly to medical care providers for medical care.We recommend that you review the above and other opportunities with your legal and tax advisors.

It is recommended that you review the terms of your estate planning documents, including your Wills, Revocable Trusts, Powers of Attorney, and other documents, to insure that your desires are met. We recommend a review of all provisions of your Trust and other planning documents to confirm, and if necessary, consider changes, taking into consideration the increased exemptions may disappear in 2026 absent further legislation.