Top 3 Estate Planning Law Changes for 2023

 

Will a few recent changes in estate planning laws affect you, your estate and/or your estate plan? 

 

1) Gift Tax Exclusion

The gift tax exclusion amount in 2023 increased from $16,000 per individual ($32,000 per married couple splitting their gifts). The amount for 2023 is $17,000 per individual or $34,000 per couple. In other words, you can give up to $17,000 to as many people as you wish without those gifts counting against your lifetime exemption.

 

2) Federal Estate Tax Exemption

The Federal Estate and Gift Tax exemption increased to $12.92 million per individual (or $25.84 million for a married couple), up from $12.06 million in 2022. This means that you can gift or transfer a total of $12.92 million of assets over the course of your life and at your death without owing any Federal Estate tax.

The IRS and Treasury have clarified that the government will not “claw back” gifts given between 2018-2025 that exceed $5 million, with respect to someone who dies in or after 2026.

However, under the 2012 Act, the $12.92 million exemption will end on December 31, 2025, and sunset to $5 million (adjusted for inflation).

If you believe that your estate may be threatened by this upcoming reduction, give us a call at 615-933-7636 to learn more about how to protect + preserve your estate now while you can!

 

3) Corporate Transparency Regulations

The Corporate Transparency Act will become effective on January 1, 2024. This requires certain entities to disclose “beneficial owners” to the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025. Entities that must meet this new requirement include LLCs, Corporations, and Limited Partnerships.

“Beneficial owners” are defined as any individual who directly or indirectly:

• Owns or controls at least 25% of the company.
• Exercises substantial control over the company.
• Are trustees of a trust, trust beneficiaries who are the sole recipient of income and principal, or a trust settlor with the power to revoke or withdraw all assets.

To find out if you, your estate or your estate plan may be affected by any of these changes or any additional proposed changes, contact us at clientservices@legacylawtn.com to schedule a complimentary call to learn more!