Federal Estate Tax Exemption Increase for 2016
A quick post to inform you all that the Federal Estate Tax Exemption, which increases annually with inflation under 2012’s American Taxpayer Relief Act, increased from $5.43 million per person in 2015 to $5.45 million per person in 2016. For married couples, the exemption is a whopping $10.9 million.
For Californians, this means that you may own up to $5.45 million in your estate without incurring estate taxes. Recall, California does not have a state estate or death tax. For married couples in California, you may own up to $10.9 million without incurring federal estate taxes using what is known as portability. Portability allows the surviving spouse to add any unused portion of the deceased spouse’s exemption amount to the surviving spouse’s exemption amount. This can result in a dramatic increase in the surviving spouse’s exemption amount and further tax savings if the proper planning is done.
Despite the massive Federal Estate Tax Exemption amount and the annual increase in the amount, there remains myriad reasons to plan your estate. To discuss the advantages of planning your estate, give our office a call to schedule a free one-hour initial consultation.