Estate Planning Watch Out For the Cliff

Watch out for the coming estate tax cliff.

The Tax Cuts and Jobs Act increased the estate tax exemption amount through 2025. After 2025 the unified credit drops from $12.92 million per individual for 2023 to a figure around $7 million, depending on inflation adjustments, in 2026.

Taxpayers concerned about the drop in the unified credit may be considering making sizable gifts in 2023, 2024 and 2025. The IRS has assured taxpayers that such gifts, made under the current unified credit, will not be clawed back into the estate if the unified credit is eventually reduced.

Note: NEVER gift money or property you might need. Once a gift is made you cannot demand the return of the funds or property.