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In this video I estimate future estate tax exclusion amounts. So it’s fairly well known that for people who die in 2023, the estate tax exclusion amount is $12.92M. This means that as long as you did not make any lifetime gifts in excess of the gift tax annual exclusion (currently $17,000 for 2023), then you can leave $12.92M of assets to your heirs when you die free of the 40% estate tax.

But what will the exemption be for the next three calender years? Well, as far as estate planning goes, it’s going to get a little crazy. You see, this estate tax exemption (also referred to as the gift and estate tax exclusion amount) is adjusted for inflation each year. And on January 1, 2023, it took a pretty big jump from $12.06 million to $12.92 million. Now I’m just speculating and estimating, but I figure the estate tax exemption for the year 2024 will be somewhere around $13.5M, but we won’t know for sure until later in the year. And I’m also making a wild guess that in 2025, the estate tax exemption will be maybe a little over $14M per estate, which if that’s true that means that if a married couple both die in 2025 (kind of a terrible thought), they will be able to leave more than $28M of assets to their survivors completely free of the 40% federal estate tax.

However, its scheduled to get interesting in 2026. That’s when parts of the Tax Cuts and Jobs Act of 2017 (also known as the Trump tax cuts) are set to expire (or as they say in tax circles - these tax benefits will sunset), and the estate tax exclusion will revert back to the pre-Tax Cuts and Jobs Act levels. And with the estate tax exemption scheduled be to cut in half on January 1, 2026, I’m guessing the exemption at that time will be $7M and some change. Now this will happen barring any action on the part of Congress.

0:00 The Future of the Estate Tax Exemption
0:34 Estimated Exemption for 2024
1:11 Estimated Exemption for 2025
1:38 The 2026 Sunset
2:21 The Uber-Wealthy Will Use Their Exemption During Lifetime