New changes to gift and estate taxes are going into effect in 2022, boosting the official estate and gift tax exemption to $12.06 million per person for deaths throughout the year. This is up from the $11.7 million tax exemption in 2021. As for gift taxes, the annual exclusion amount has increased from $15,000 in 2021 to $16,000 as of this year.
These new laws and numbers speak to the abilities of wealthy taxpayers, and have raised the number of direct payments for medical and tuition expenses to be unlimited, with no gift or estate tax repercussions. If you’re confused about how your inheritance will be taxed over the next year, be sure to contact a trust and probate attorney for a clearer understanding.
The Impact of New Gift and Estate Taxes
With these new exemption and annual exclusion amounts, wealthier taxpayers will be able to transfer more of their estate to heirs, tax-free, whether living or dead. On the largest estates, the tax is assessed at 40%, though wealthier individuals can effectively avoid estate taxes by simply transferring their assets to heirs early. This is done by giving large gifts, often in the millions to meet much of the $12 million exemption mark, along with numerous $16,000 annual exclusion gifts which aren’t included in the $12 million limit.
Gift and Estate Taxes for Married Couples
With these new gift and estate taxes come changes to amounts for individuals and married couples; while individuals can now leave a bit more than $12 million to heirs without paying federal estate or gift taxes, married couples are able to distribute double that amount, or $24.12 million. Couples who have already reached their cap on lifetime gifts will also have more room to give away an additional $720,000 when compared to last year, due to the higher exemption.
Gift and estate tax changes are confusing to navigate, which is why expert help from a vetted trust and probate attorney is recommended.
Contact Gokal Law
Do you have a probate court case on your hands? Ensure that your petition gets filed by contacting Alison Gokal of Gokal Law Group, Inc. Our team specializes in litigation and counseling related to trust and probate law and will diligently represent you in the courts. In short, we will give you the support you need to win your case. The sooner you contact us, the more effective we are at getting you the justice you deserve.
Gokal Law Group is a family firm that treats our clients as if they were our own flesh and blood. We fight for our clients as we would our own children, sisters, brothers, and parents. We are our clients’ Warriors, fighting to bring them justice and right the wrongs they have endured.
Each attorney has a specific practice area for which they are tried, tested, and battle-ready. Each has vast years of experience in their practice area, providing them the knowledge, skills, and vision to fight and win. Learn more about Gokal Law Group.