Saturday, July 23, 2022

The wealthy now have more time to avoid estate taxes, thanks to an IRS change

Estate planningDue to recent changes from the IRS, those who have significant wealth will now find it easier to avoid federal estate taxes. The IRS improved “portability,” which is used by high-net-worth married couples expecting to owe federal estate taxes when one spouse dies. Now, surviving spouses will have up to five years, instead of only two years, to elect portability after their spouse passes.

In 2022, there is a $12.06 million exemption, meaning federal taxes won’t be levied on $12.06 million or less that is left to children or other non-spouse beneficiaries during life or at death. Anything above that will be subject to 40% estate taxes.

These new changes are made even easier by having the ability to elect portability on an estate tax return instead of having to request guidance from the IRS. While estate tax returns may cost between $5,000-20,000, that amount pales in comparison to 40% on every million dollars of the portability exemption.

For more information:

See Kate More, CFP “The wealthy now have more time to avoid estate taxes, thanks to an IRS change” CNBC, July 21, 2022.

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2022/07/the-wealthy-now-have-more-time-to-avoid-estate-taxes-thanks-to-an-irs-change.html

Current Affairs, Estate Planning – Generally, Estate Tax | Permalink

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