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IL Estate Planning Blog

Tuesday, March 21, 2017

IRS Announces 2017 Estate And Gift Tax Limits: The $11 Million Tax Break

For 2017, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. That means an individual can leave $5.49 million to heirs and pay no federal estate or gift tax. A married couple will be able to shield just shy of $11 million ($10.98 million) from federal estate and gift taxes. The annual gift exclusion remains at $14,000 for 2017.

 

The federal estate and gift tax exemptions rise with inflation, and the Internal Revenue Service announced the new numbers here. Forbes' Kelly Phillips Erb has all the details on 2017 income tax rates here.

 

The estate tax changes matter to wealthy folks who try to whittle down their estates to keep below the threshold and avoid the 40% federal estate tax. “There are clients who use every dollar of exemption as soon as it’s available,” says Beth Kaufman, an estate lawyer with Caplin & Drysdale in Washington, D.C. Now a couple who has used up every dollar of their exemption before the increase has another $80,000 to play with. They could use it as seed money for a trust or to fund a GRAT, two popular wealth transfer strategies that can leverage these little slivers of exemptions, Kaufman says.

 

In the meantime, if you live in one of the 18 states or the District of Columbia that levy separate estate and/or inheritance taxes, there’s even more at stake, with death taxes sometimes starting at the first dollar of an estate. (See Where Not To Die In 2017). New Jersey just repealed its estate tax (for 2018) but left its inheritance tax on the books.

 

 

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With two offices in Oak Lawn and Oak Brook, Stephen M. Sutera assists clients throughout Cook County, DuPage County and Will County IL including Chicago, Hometown, Barrington, Burbank, Burr Ridge, Chicago Ridge, Darien, Downers Grove, Evergreen Park, Geneva, Worth, Bridgeview, Palos Park, Palos Hills, Palos Heights, Hickory Hills, Midlothian, Willow Springs, Oak Forest, Orland Park, La Grange, Brookfield, Berwyn, Tinley Park, Hinsdale, Villa Park, Clarendon Hills, Westchester, Westmont, Lombard, Elmhurst, Western Springs, Berkeley, Downers Grove, Fox Valley, Glen Ellyn, Willowbrook, Aurora, Addison, Lisle, Forest Park, Bensenville, Wheaton, River Forest, Itasca, Shorewood, Frankfort, Mokena, Naperville, Crest Hill, Homer Glen, New Lenox, Bollingbrook, Schaumburg, Channahon and Woodridge.



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