Heads-Up – The Estate Tax and Gift Tax Exclusion Amounts Are Changing

Heads-Up – The Estate Tax and Gift Tax Exclusion Amounts Are Changing

The “death tax”, as it is lovingly referred to by many, is going up again. And by “up”, I mean that the exclusion amount that all Americans have at their disposal to avoid paying this tax is increasing. That is a good thing for taxpayers, although as I wrote about earlier this year in March, very few people actually pay this tax.

More formally known as the federal estate tax, it applies to transfers of wealth when a person dies if the value of that “wealth” is more than that person’s exclusion amount. In 2017, Americans dying with more than $5.49 million dollars of assets in their estate would pay an additional 40% tax on every dollar over the exclusion amount. And for those who make substantial gifts during their lifetimes, any gift that exceeds the annual gift exclusion amount ($14,000 in 2017) would decrease that available $5.49 million dollar exclusion by the dollar amount of the gift above $14,000.

For 2018, the federal estate tax exclusion amount is increasing from $5.49 million dollars to $5.60 million dollars, and the annual gift exclusion is increasing from $14,000 to $15,000. The federal estate tax exclusion increase was expected, as the exclusion was indexed for inflation when previous legislation amended the Internal Revenue Code. However, the annual gift tax exclusion has been stuck at $14,000 since 2013, so its increase was somewhat unexpected.

In the grand scheme of things, these increases may seem relatively insignificant. And the tax reform plans brewing in Washington D.C. could change the scheme entirely, especially if the federal estate tax is eliminated. But no matter what happens, there will still be various planning techniques available to clients who want to make lifetime gifts but avoid triggering gift tax liability, transfer significant wealth to future generations without triggering estate tax liability or adverse income tax/capital gains issues, etc.

If you have any questions, please do not hesitate to contact me.


Cunningham Dalman, PC publishes this web site and its component parts to inform users about our firm, our attorneys and general new developments in the law. The web site and blogs are not intended as legal advice on any matter. There are many factors that may affect your situation. You should not act or refrain from acting because of information found here without first seeking appropriate legal or other professional advice from someone who is familiar with your particular circumstances.

In the operation of this web site and our blogs, we do not intend to create an attorney-client relationship with you and no such relationship shall be created by your use of this web site. Such a relationship can only be established to the extent an attorney at Cunningham Dalman, PC expressly agrees to undertake the relationship. Please do not communicate to us any information you regard as confidential unless and until we have established a formal attorney-client relationship with you. Any information you send to us before we establish an attorney client relationship may not be privileged or confidential. Information you send to us over the Internet may not be secure.

Our Practice Areas
Our Practice Areas

Recent Posts


Cunningham Dalman P.C.
PO Box 1767
321 Settlers Road
Holland, MI 49422-1767

Google Map


Best Law Firm 2023 - Best of the Best
Scroll to Top

Tell Us How We Can Help You

Send us a quick message or call us at 616.392.1821!

Seminar Registration

Fill in the form below to reserve your spot today for each person attending. If you have any questions, please call the office at 616.392.1821.

Call Now Button