What Are the Current Exemption Limits for Estates and Gifts?
People say that the only things certain in life are death and taxes. How can you be sure that after your death, your beneficiaries do not have to pay much of your estate in taxes? Fortunately, a large amount is automatically exempt from taxes. If your estate is even bigger, and you don’t mind parting with some of the funds now, you can also make large gifts that are tax exempt. Here are the current federal limits.
- Estate tax exemption – Currently, the estate tax exemption limit is $11.58 million. For most estates, that means the entire sum will be tax-free for your beneficiaries. But what if you have a larger estate and want to share some of the inheritance while you are still alive?
- Annual gift exclusion – You can gift someone $15,000 with the person not having to pay federal income tax on it. This can allow you to dispense quite a large estate over time without tax implications. For example, if you and your spouse each write a check to your child and their spouse, you can actually give $60,000 per year to a couple. In this way, you can get the estate down under the tax exemption limit while you are still alive.
Smart Ways to Pass on an Inheritance in Southern California
San Diego’s estate planning experts are at Petrov Law Firm. To learn more about how to distribute your estate wisely, call 619.344.0360, and speak with one of our attorneys.