In this vlog, Litherland, Kennedy & Associates Attorney Justin M. Kennedy discusses the 2025 Estate and Gift Tax Exemptions.
Transcript:
Hello, I’m attorney Justin M. Kennedy with Litherland, Kennedy and Associates, a California estate planning and elder care law firm.
I want to let you know that the IRS has recently released the updated Federal Estate and Gift tax values for 2025.
Currently, in 2024, the federal estate and gift tax exemption is $13.61 million dollars per person. This means that a married couple may pass $27.22 million dollars free of the federal death tax.
In 2025, these amounts will increase to: $13.99 million dollars per person. Why the IRS did not make that an even $14M? I do not know, but that results in a combined exemption of $27.98 million dollars for a married couple.
To put this in perspective, when I first began practicing law, the federal estate tax exemption was just $1 million per person. Today, married couples can transfer nearly $28 million free of federal estate tax.
However, it is important to note that the current estate tax exemption is set to expire, or sunset, in 2025 meaning in 2026, we will revert back to a $5 million dollar federal estate tax exemption per person unless Congress enacts new legislation.
Please note after our recent election, the legal scholars that I have consulted with expect that Congress will act to preserve the existing exemption.
As for the annual gift tax exclusion in 2024 it is $18,000 and in 2025 it will increase to $19,000.
This means that you may gift up to $19,000 dollars per person, per year free of the federal gift tax. A married couple could gift $38,000 gift tax free.
If you would like to learn more about how these limits may impact you and your estate planning needs, then we invite you to register for one of our upcoming presentations. You may find those presentations on our website attorneyoffice.com.
Thank you.
