On December 30, 2016

The Internal Revenue Service (IRS) has announced the federal estate and gift tax limits for 2017, based on inflation.

IRS Reveals 2017 Estate and Gift Tax Limits

IRS Reveals 2017 Estate and Gift Tax Limits

Here’s the breakdown of some of the most significant changes put in place for the coming year:

  • Estate and gift tax exemptions for individuals are set at $5.49 million.
  • Estate and gift tax exemptions for married couples are set at $10.98 million.
  • The annual gift exclusion for 2017 is $14,000.

To shed some more light on what these exemptions and exclusions mean – and how you may be able to take advantage of them in estate planning, below, we have answered some common questions about estate taxes and gift taxes.

What Is Included In (& Excluded From) the Estate for Tax Purposes?

For the purposes of calculating estate taxes in 2017, it’s important to understand what assets are included in – versus excluded from – the taxable estate. According to the IRS, the “Gross Estate” includes anything a decedent owned or had interest in at the time of death. This can include both probate and non-probate property like (but not necessarily limited to):

  • Cash and securities
  • Real estate holdings
  • Insurance policies
  • Assets held by trusts
  • Annuities
  • Business-related interests.

In contrast, assets typically not included in the Gross Estate are those that are owned by a decedent’s spouse entirely, as well as “lifetime” gifts that are complete (i.e., there are no outstanding powers or controls exerted over those gifts).

Can I Do Anything to Limit Future Estate Tax Obligations?

Yes, and the specific options you have will depend on the nature of your estate, as well as your beneficiaries and your overall estate planning goals.

For instance, you may want to designate certain assets for charity or give gifts to loved ones now (or in the near future). It’s advisable that you speak to an estate planning lawyer to find out more about your best options for minimizing future estate and/or gift tax liability.

How Does the Exclusion Impact Couples?

The exclusion effectively allows couples to double the amount of their gifting without having to pay estate or gift tax. In fact, even if only one of the spouses is doing the gifting, that spouse can still give up to the doubled limit without worrying about any tax implications. That’s because the IRS still recognizes that the amount came from a couple, according to IRS Code § 2513.

Ready for More Answers? Contact a Denver Estate Planning Attorney at JR Phillips & Associates, PC

For experienced help with estate planning and/or estate taxes, contact a trusted estate planning attorney at JR Phillips & Associates, PC. Our team of skilled lawyers provides a thoughtful, comprehensive approach to our clients’ estate planning and administration needs – and we are ready to meet with you and develop an plan for protecting your interests (and meeting your goals) as you proceed with any aspect of estate planning or administration.

To schedule an initial consultation with one of our lawyers and find out more about how we can serve you, just call us at (303) 741-2400 or email us using the contact form on this page.

From offices in Denver, we serve clients throughout the southwest and southeast Metro areas, including (but not limited to) Highlands Ranch, Littleton, Castle Rock, Parker, Aurora, Greenwood Village and Englewood.

Categories: Estate Planning, Estate Taxes, Trusts