Year End Estate Planning Strategies from the National Law Review

A recent article from the National Law Review shares 2022 year end estate planning updates and strategies for clients to consider. This article summarizes this publication, which can be found in its entirety here:

Gifts for 2022 

  • A person can make gifts up to $16,000 per recipient to an unlimited number of persons free from gift tax. 
  • For a married couple splitting the gift, this means they can gift up to $32,000 per recipient. 
  • Gifts are within an annual exclusion amount, so they do not reduce the tax payer’s lifetime federal estate and gift tax exemption. 
  • This creates an easy and effective way to pass wealth to family members or others. 
  • The gift must be made by December 31, 2022 to qualify. 
  • All gifts made outright can qualify and certain gifts made to a beneficiary in trust can qualify also if properly structured. 
  • In 2023, the annual amount will increase to $17,000 per recipient. 

The gift exclusion is a tool that is used by many of clients because it is a straightforward and easy mechanism for passing wealth to family members and others without a gift tax consequence for the giver. For clients with greater resources, the lifetime federal estate and gift tax exemption amounts should be considered in estate planning.

What is the lifetime federal estate and gift tax exemption?

  • This is the combined amount a person can transfer during life without 
    • triggering a current gift tax 
    • or upon death, transferring free from estate tax. 
  • However, transfers to U.S. citizen spouses and qualified charitable organizations are not generally subject to tax. 
  • Annual gifts within the gift exclusion described above do not “count” against this lifetime number
  • Other lifetime gifts, however, will reduce the amount of estate tax exemption available at death. 
  • Currently the lifetime exemption is $12,060,000 per taxpayer estate.
  • In 2023, this number will go up to  $12,920,000 per taxpayer estate.
  • This allows opportunities for estate planning in 2023 with these new numbers in mind.  

Contact an Experienced Family Lawyer

Whether you are just embarking on building your wealth or whether you have significant assets, estate planning can be helpful in utilizing tax advantageous tools and planning for the outcomes you seek. At the Law Office of David Knecht we have extensive experience with estate planning in California and can help you successfully prepare the right estate plan for you and your family. We look forward to assisting you.  Contact us at 707-451-4502.