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Estate Tax Exemptions Double, Present New Asset Options

Edward Marsi

A senior financial consultant with TD Ameritrade in New Hampshire, Edward “Ed” Marsi works with clients to set in place comprehensive financial goals and retirement plans. Edward Marsi has extensive knowledge of strategies that enable consistent wealth accumulation through the years.

The tax bill passed by Congress in late 2017 doubles the amount of exemption that can be claimed on gift, estate, and generation-skipping taxes, from a base of $5 million to a base of $10 million.

Taking effect in 2018 and phasing out in 2025, when it will revert to a base of $5 million, the exemption is inflation indexed. What this means in practical terms is that individuals can now double the assets they shelter from federal taxes. This number for 2018 is $11.2 million for individuals, with couples able to exclude $22.4 million.
Many families are looking into utilizing exemptions as gifts, in case the 2025 sunset occurs. Gifts can be set up in a number of ways, from generation-skipping trusts to new or existing irrevocable trusts. They can also be paired with life insurance and defined in philanthropic ways, through charitable lead trusts.

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