2019 Estate Tax Exemption Doubled by New Tax Law

Updated: May 8, 2019

What is the estate tax exemption in 2019?

The Tax Cuts and Jobs Act of 2017 was signed into law by President Trump on December 22, 2017. This bill introduced a major increase in the amount of money that can be gifted or transferred without incurring a federal gift estate tax—in fact, the exempt amount has doubled!

From 2018 to 2025, the tax-exempt amount that you can pass on or “gift” is about $11.18 million for unmarried individuals and about $22.36 million for married couples.

These transfers or gifts usually come in the form of financial gifts or estate transfers before they are subject to an estate or gift tax.


What is an estate tax?

An estate tax is simply a federal tax placed on the transfer of a deceased person’s estate (all of the person’s assets, real properties, business interests, and finances).

In the U.S., the estate tax applies to property transferred through instruments such as a will, trust, and certain types of insurance policies and bank accounts. The estate tax exemption means that

What is a gift tax?

A gift tax is a federal tax placed on transfers of property during a person’s lifetime. According to the IRS, “you make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return.”

Does the new tax law affect me?

Because of the high exemption amount of $11.18 million for unmarried individuals and $22.36 million for married couples, this new law affects only a certain part of the population. 

According to IRS data, there were just over 12,400 estate income tax returns filed throughout the U.S. for the tax year 2016. Of that total, only 4,142 returns filed were for estates worth $10 million or more. 

This sample alone shows that the increased estate tax exemption mainly affects high net worth estates. But these increases will last only until December 31, 2025. Unless there is further legislative action, the exemption amounts will return to 2017 levels.

Create a plan to correctly pass on your inheritance

Now that you know about the increased exemption amount for federal estate tax, it's time to create a plan for your home and assets to avoid the dangers of probate.

Amity Law Group's experienced estate planning attorneys can help you create a plan that fits you and your family. Whether it's drafting a will or creating a detailed plan for a high net worth estate, see why we've been trusted by families for more than 25 combined years.

If you have any questions, call our team at (626) 307-2800 or submit the form below to request a free consultation.

Request Your Free Consultation

Name *