Estate and Gift Tax Planning in 2016

For the year 2016, the amount a person can pass during his or her lifetime or upon death free of estate and gift tax will increase due to an inflation adjustment. Effective January 1, 2016, the federal estate and gift tax exclusion amount will be $5,450,000 per person (up from $5,430,000 in 2015). Current law also allows a married couple to roll-over any unused individual exemption amount from a deceased spouse to the surviving spouse. That means that, for a married couple, they may be able to pass up to $10,900,000 to their children (or other beneficiaries) without triggering a federal estate or gift tax (this is up from $10,860,000 in 2015). The top tax rate on amounts above the exemption is 40%. The state of Wisconsin imposes no separate estate or gift tax. Also continuing in 2016, individuals are able to make gifts that are excluded from federal gift tax in amounts not exceeding $14,000 per year, per recipient. Annual exclusion gifts are tax-free and do not count against a person’s lifetime exemption amount. To learn more, please contact one of Bosshard Parke Ltd.’s knowledgeable estate planning attorneys.