New Estate and Gift Tax Numbers

I have previously written how the new structural changes to the federal estate and gift taxation should impact estate planning here. However, as of January 1, 2019, there are increases in the numbers.

The amount that you can transfer tax-free, during life or at death, is now $11.4 million per person ($22.8 million for married couples if portability was elected). If you exceed the limit, you  (or your heirs) will owe tax of 40 percent. As in the past, there is an unlimited deduction from estate and gift tax for transfers to your spouse.

And can give another person $15,000 per year per donee without it counting against the lifetime exemption discussed above.  For gift tax purposes, you can gift-split as well, so you and your spouse can give $30,000 per year per donee after January 1. These annual exclusions are over and above the lifetime unified credits. However, do not confuse or conflate these estate and gift tax exemptions with Medicaid rules. Medicaid counts all gifts; there are no amount of transfers of assets for less than fair market value which are exempt. These federal estate and gift tax exclusions do not apply when calculating Medicaid eligibility.