Contact Us Online

Social Media Karp Law Blog Twitter Facebook

Estate Tax Exemption Increases in 2019

11-17-2018 - The Federal Unified Gift and Estate Tax Exemption will rise in 2019 to $11.4 million per person (up from $11.18 million in 2018.) This is the amount an individual may pass to heirs during his/her lifetime without estate tax consequences. A married couple may pass twice that amount. The tax on the amount in excess of the exemption will remain at 40%. Obviously, very few Americans' estates are taxable under this legislation. The Tax Policy Center estimates that less than 2,000 estates are taxable in 2018. 

The Annual Gift Tax Exclusion will remain unchanged in 2019, at $15,000. This is the amount you may give to as many individuals as you wish in any given year without it being deducted from your federal lifetime exemption. Married couples may pass twice that amount. 

If you have an estate that is substantial and may be taxable in the future, consult an experienced estate planning attorney to plan to reduce the tax bite as much as possible.


Tax Rate Not Necessarily Permanent

It is important to note that these estate tax rates, introduced in the December 2017 Tax Cuts and Job Act, are not permanent and are scheduled to expire Jan. 1, 2026. That is when the Federal Unified Gift and Estate Tax Exemption reverts to its pre-legislation figure of $5.49 million. Many Republicans are eager to see the changes made permanent, while others would like to abolish the estate tax altogether. The Democrats, which will control the House of Representatives beginning in 2019, consider the legislation a hand-out to the wealthy who do not need the handout. Thus, the future of these tax rates, even before their expected phase-out date of 2026, is uncertain.


Portability Must be Elected

Portability remains in place, which means that a surviving spouse may elect to use any unused portion of the deceased spouse's federal estate tax exemption. However, portability is not automatic. A tax return for the deceased spouse's estate must be filed (even if the estate is not taxable), and the portability option selected 



State Estate Taxes Remain in Effect in 17 States

Florida does not have a state estate tax. However, 17 states and the Dsitrict of Columbia do. Floridians who may eventually move to one of those states should work with their estate planning attorney to incorporate that possibility into their estate plans. Among the states with their own estates taxes are New York, Maryland, Rhode Island, Massachussetts, Connecticut and Illinois. 





Back to Elder Law Legal Updates