Major Gift Planning Opportunities for 2024

The federal gift, estate and generation-skipping transfer (GST) tax exemptions for 2024 are historically high and present significant tax-free gifting opportunities next year. Exemption Amount Increasing to $13,610,000 in 2024. This means that, beginning in 2024, you will be able to transfer $13,610,000 to beneficiaries during your lifetime and at death without incurring gift or estate tax. If you’re married, you and your spouse together may transfer $27,220,000. If you have previously maximized lifetime gifts under the current limits, additional tax-free gifts may be made in 2024 totalling $690,000 per individual or $1,380,000 per married couple.

The GST tax exemption also will increase to $13,610,000 ($27,220,000 per married couple) in 2024. Strategic gifts to trusts for the ultimate benefit of grandchildren or more remote descendants may be made in 2024 to leverage the increased GST exemption.

The annual exclusion amount is also increasing in 2024 and you will be able to make tax-free gifts up to $18,000 (or $36,000 for a married couple splitting gifts) to an unlimited number of recipients. Finally, the special annual exclusion from gift tax on gifts to a non-U.S. citizen spouse will increase to $185,000 in 2024.

It is important to note that the increased lifetime gifts and estate tax exemption was enacted through the Tax Cuts and Jobs Act of 2017 – this is due to sunset on January 1, 2026. Unless congress acts before this date, the exemptions will revert back to the 2017 levels with an inflation adjustment (likely to be around $7 million for individuals and $14 million for married couples).

As things currently stand, it is uncertain whether these increased exemptions will be extended by congress – it would be prudent to consider planning for lower exemptions from 2026.

Please contact our team if you require further information.