The Future of Estate Taxes for 2024

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Estate taxes are a major consideration for people and families when making financial plans, especially if they have large assets. Effective estate planning requires an understanding of recent and impending changes to the estate tax laws. We will examine estate taxes in the future in this extensive guide, with an emphasis on changes that are predicted for 2024 and later.

Background on Estate Taxes

When someone passes away, estate taxes—also referred to as inheritance taxes—are assessed on the transfer of their property. The main goals of estate taxes are to control wealth transfers and provide revenue for the government. The estate tax has a long history in the US, and tax laws have changed on a regular basis.

The Tax Cuts and Jobs Act

The 2017 Tax Cuts and Jobs Act (TCJA) was one of the biggest amendments to estate tax laws in a long time. The TCJA brought about a number of changes to estate tax laws, one of which was an increase in the basic exclusion amount, which sets the threshold for taxable estates.

Estate Tax Exemption Amounts for 2024

Changes in the amount of the estate tax exemption are anticipated as 2024 draws near. The Internal Revenue Service (IRS) periodically updates these numbers to account for inflation. Let’s examine the expected changes for the following year.

Basic Exclusion Amount for Individuals

The amount below which federal estate taxes do not apply to an individual’s estate is known as the basic exclusion amount. The base exclusion amount is $12.92 million in 2023. It is anticipated to rise to $13.61 million per person by 2024, though. With this increased exemption, people can leave more wealth to their heirs without having to worry about paying estate taxes.

Increased Exemption for Married Couples

When it comes to estate tax exemptions, married couples benefit more. Thanks to the idea of portability, the surviving spouse may use any unused portion of the deceased spouse’s exemption. Married couples’ combined exemption is anticipated to reach $27.22 million in 2024, offering even more chances for tax-efficient wealth transfers.

Annual Exclusion Amount for Gifts

The IRS levies gift taxes on some transfers made during a person’s lifetime in addition to estate taxes. Nonetheless, there is an annual exclusion amount that, up to a certain amount, permits people to give gifts tax-free. The yearly exclusion amount is anticipated to be $18,000 for each recipient in 2024. Accordingly, a person’s annual gift to each recipient can be up to $18,000, and it won’t count against their lifetime gift tax exemption.

Utilizing the Annual Exclusion for Efficient Wealth Transfers

A useful method for transferring wealth to loved ones without paying gift taxes is the annual exclusion amount. Through yearly contributions up to the exclusion threshold, people can progressively lower their taxable estate and leave assets for future generations. When used in conjunction with other estate planning strategies, like irrevocable trusts, this tactic can be very helpful.

Key Considerations for Estate Planning in 2024

When creating a successful estate plan, it is crucial to take a number of factors into account as the estate tax landscape changes. Let’s look at some important factors to think about for estate planning in 2024 and beyond.

Take Advantage of the Exemption

It is a good idea to review your estate plan and make use of the higher exemption amount, given the expected increase in the estate tax exemption amount. You can reduce potential real estate taxes and optimize the benefits of the exemption by employing sophisticated estate planning techniques like trust and gifting planning.

Seek Professional Guidance

Estate planning can be complicated, and getting expert advice is even more important in light of impending new law changes. A knowledgeable estate planning lawyer can guide you through the complexities of the tax code and offer insightful advice. They can create a plan specifically for you, minimizing the impact on taxes and guaranteeing that your wishes are carried out as intended.

Consider the Impact of State Taxes

Although this guide focuses on federal estate taxes, you should always take state taxes into account when creating an estate plan. Certain states have their own inheritance or estate taxes, with varying rates of taxation and exemptions. Creating a thorough estate plan requires speaking with an attorney knowledgeable about the tax regulations in your state.

Evaluate the Use of Irrevocable Trusts

Irrevocable trusts are an effective estate planning tool that let people move assets outside of their taxable estate while keeping some degree of control over those assets. Irrevocable trusts can be especially helpful in minimising estate tax obligations and safeguarding wealth for future generations, especially with the anticipated increase in exemption amounts in 2024.

Plan for Future Changes

Even though the current exemption amounts offer a great benefit for estate planning, it is important to stay alert and prepare for potential changes to the tax code in the future. Over time, estate tax laws have changed, so it’s important to keep up with any new legislation that might have an impact on your estate plan.

Best Tax Strategies for Gig Economy Workers


In conclusion, with the upcoming year, now is a good time for people, especially married couples, to review their estate planning techniques in light of the projected changes to the estate tax in 2024. There is a rare chance to give large lifetime gifts to family members, lowering the size of the taxable estate and minimizing future estate taxes, as the federal estate tax exemption amount and the gift tax exemption amount are at all-time highs.

One efficient way to transfer wealth to beneficiaries without paying gift taxes is to make use of the annual gift tax exclusion amount. This plan offers a simple way to progressively lower the value of your estate by allowing tax-free gifts up to a specific amount per recipient per calendar year. Making sizable gifts now can benefit US citizens, particularly those with high net worths, as it enables the transfer of assets that might increase in value in the future, thereby removing that appreciation from the estate.

Employing irreversible trusts, like spousal lifetime access trusts (SLATs), can improve estate planning even more by offering a way to transfer assets while maintaining some degree of control and access. These trusts can be set up to benefit from the current exemption amounts and provide security from upcoming changes to the tax code.

It’s crucial to remember that when planning your estate, you should also take the estate tax rate, the implications of capital gains, and any potential generation-skipping transfer taxes into account. The current law also permits yearly inflation adjustments based on the consumer price index, which should be carefully watched since they have the potential to impact exemption amounts.

Speak with a qualified professional for legal and financial advice, as the tax code is complicated and may change in the future. Based on your unique circumstances, a financial advisor or estate planning lawyer can offer tailored advice that will help you understand the intricacies of the tax code and make decisions that will support your long-term financial objectives.

In conclusion, there are chances and challenges for estate planning in the years ahead due to estate taxes in 2024. People can minimize their estate taxes and manage their estates more efficiently by making use of the high estate tax exemption amount, annual gifts, and strategic estate planning tools like irrevocable trusts. Ensuring the smooth transfer of wealth to future generations and navigating the changing estate tax return landscape will require staying informed and getting professional advice.

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