Wealth Preservation_Flipbook_2023

Federal Estate and Gift Taxes Federal estate and gift taxes affect only relatively large estates. However, for those estates that are affected, the tax burden could be substantial. Lifetime Exclusion A lifetime exclusion applies to the combined gift total given during your lifetime and the value of the estate you leave after your death. In 2023, the individual exclusion is $12.92 million (the exclusion is indexed annually for inflation). Assets left to your spouse are not subject to the estate tax, and the unused portion of your exclusion can be used by your surviving spouse if certain steps are taken (this provision is called portability). Thus, the total exclusion for a married couple could reach $25.84 million (in 2023). For gifts and/or estates that exceed the exclusion amounts, the top federal estate tax rate is 40%. The estate has to pay any taxes before assets can be distributed to the heirs.