What is the federal estate tax exemption?

What is the federal estate tax exemption?

The federal estate tax exemption is the amount of money that can be passed on to heirs without incurring federal estate taxes. As of 2023, this exemption is $12.92 million per individual.

How does the exemption amount change over time?

The exemption amount can change due to inflation adjustments or new tax laws. It's reviewed periodically, typically every few years.

Are there any states that have their own estate taxes?

Yes, some states impose their own estate taxes, which can have different exemption amounts and rates. It's important to check the specific laws in your state.

What happens if my estate exceeds the exemption limit?

If your estate exceeds the exemption limit, the excess amount may be subject to federal estate taxes, which can be as high as 40%.

Can I give away assets to avoid estate taxes?

Yes, gifting assets can reduce the size of your estate, but there are annual gift tax exclusions and lifetime limits to consider.