Lathrop GPM has made available for download their article, “Estate Planning 2023 Federal Tax Update,” published in JDSUPRA. The article begins as follows:
As we start the new year, this Federal Tax Update highlights estate planning-related federal tax information that may be helpful as you consider planning options for 2023. Because Congress could pass legislation that changes this information during the year, you should contact your Lathrop GPM estate planning attorney for advice prior to taking any transfer tax planning action.
Key Tax Concepts for 2023
- Lifetime Exclusion Increased to $12,920,000: As of January 1, 2023, the federal gift and estate tax exclusion amount, as well as the exemption from generation-skipping transfer (GST) tax, (collectively, the “lifetime exclusion amounts”) have increased to $12,920,000 (thus a combined $25,840,000 for a married couple). That is an increase of $860,000 per donor. This presents additional gifting opportunities for individuals who had previously used their full lifetime exclusion amounts.
- Lifetime Exclusion Will Decrease: However, please note that the lifetime exclusion amounts are still scheduled to decrease on January 1, 2026, to $5,000,000 adjusted for inflation unless Congress acts to prevent the decrease. This is a “use it or lose it” scenario. If you have sufficient assets to gift your lifetime exclusion amounts, you should consider doing so prior to 2026.
- Annual Exclusion Increased to $17,000: As of January 1, 2023, the federal gift tax annual exclusion amount has increased to $17,000 (thus a combined $34,000 for a married couple). This is an increase of $1,000 per gift recipient. The annual exclusion is the amount an individual can gift per recipient per calendar year without using any lifetime exclusion amounts or paying any gift tax.
Click here to view Lathrop GPM’s summary of “Estate Planning 2023 Federal Tax Update”
Posted by Melissa Zheng, Associate Editor, Wealth Strategies Journal.
Wealth Strategies Journal 