The National Law Review has published 2019 Year-End Estate Planning: The Question Is Not Whether to Gift, But How to Gift. Federal and Illinois tax laws provide an opportunity to transfer significant amounts of wealth free of any federal gift, estate and generation-skipping transfer (GST) taxes. Some of the beneficial provisions “sunset” on January 1, 2026, which make now an ideal time to review your estate plan to ensure that you are making full use of this opportunity. Your year-end estate plan gifting should consider the current tax laws as well as changes in your personal circumstances.
Current Exemption Levels
On January 1, 2026, the federal gift, estate, and GST exemptions will be cut in half. You can take advantage of the increased federal exemptions by utilizing estate planning strategies such as gifting in advance of the sunset date.
• Federal gift, estate and GST exemptions are currently $11,400,000 for each individual, increasing to $11,580,000 in 2020.
• For married couples the exemptions are currently $22,800,000, increasing to $23,160,000 in 2020.
Gifting Options
Estate planning goals change over time. Make sure that your estate planning legal documents reflect your current wishes and strategically account for federal and state tax exemptions so that your beneficiaries and heirs and protected.
• Lifetime utilization of transfer tax exemption.
• Annual exclusion gifts.
• Tuition and medical gifts.
• Gifts to spousal lifetime access trusts.
• Grantor trusts.
• Combining gifting and selling assets to grantor trusts.
There are many year-end benefits to reviewing your estate plan in addition to gifting and gift taxes. Revisions to your legal documents may be necessary if your family circumstances have changed significantly, such as a birth, death, wedding, divorce or relocation to another state.
If you are planning your estate and have questions about gifting and gift taxes, an experienced estate planning lawyer can advise you throughout the process. To talk to a qualified attorney in Chicago or Lombard, contact the Estate & Probate Legal Group at 630-800-0112.
