Dear Trust Officer:
What is going to happen with federal estate taxes in 2018? —Interested Observer
Dear Interested Observer:
The IRS has announced that, under current law, the inflation-adjusted exemption from federal estate and gift tax will grow to $5.6 million in 2018. For a married couple, that means a total estate of $11.2 million may be kept in the family tax free. By the way, the Service also announced that the gift tax annual exclusion will grow to $15,000 in 2018. This is the first increase in several years.
Into this mix we add the tax reform legislation working through Congress this November. The initial draft calls for an immediate doubling of the exempt amount in 2018, and eventual repeal in 2024.
Interestingly, the doubling of the estate tax exemptions has less “revenue cost” than one might expect. According to the most recent IRS statistics, roughly half of taxable estates fall in the range of $5 million to $10 million, yet they pay only 11% of the total net estate tax. Estates larger than $50 million pay 42% of the total federal estate tax, though they represent less than 6% of taxable estates.
THE TRUST COMPANY OF KANSAS ABIDES BY A SIMPLE PHILOSOPHY: MINIMIZE BURDEN, BESTOW FREEDOM.
Our trust officers are always willing to discuss proposed tax legislation that may affect you. We can help you to create an investment plan that is well-aligned with your wealth management goals. If you have a specific question about the proposed tax legislation, please contact us at (800) 530-5254 or visit tckansas.com/contactus, and one of our Certified Trust and Financial Advisors will be happy to assist you.