Don’t Let the 2024 Estate Tax Basic Exclusion Amount Make You Complacent

The Internal Revenue Service recently published Rev. Proc. 2023-24, setting forth inflation adjusted items for 2024. For decedents dying in 2024, the basic exclusion amount for federal estate tax purposes has been increased to $13,610,000. While many individuals may feel comfortable that their estate will not be affected by a federal estate tax, the false sense of security could be short lived.

The 2017 Tax Cuts and Jobs Act (TCJA) authorized the current exclusion amounts, but they are subject to automatic termination at the end of 2025. Thus, the end of higher exemptions amounts draws ever closer. Absent further legislation, these exemptions will sunset as of December 31, 2025 and are scheduled to be reduced by one-half, adjusted for inflation.

Obviously, we all hope to live into 2026 and beyond, and it is important that your estate plan be able to adapt to these changes. Failure to do so could be costly for your estate and your heirs. If you would like a consultation concerning this, and other issues affecting your estate plan, please contact our estates department at (609)896-9060.