Follow Kara Linkedin Twitter Facebook
Email Kara Email
Legal Issues
Nov 1, 2017

The IRS Increased The Thresholds For 2018 Estate And Gift Taxes

Sponsored Content provided by Kara Gansmann - Attorney, Cranfill Sumner & Hartzog LLP

Residents of North Carolina are fortunate to have no estate tax (the so-called “death tax”) enforced by the state upon their deaths. 
 
However, if a North Carolina resident passes away with an estate of a certain size, federal gift and estate taxes could be assessed.
 
Each year, the Internal Revenue Service (IRS) updates the threshold limits that trigger federal estate and gift taxes, and the IRS recently announced the 2018 threshold limits. In general terms, these amounts are adjusted for inflation. 
 
Currently, federal estate and gift taxes are assessed for an individual’s estate of $5.49 million dollars or greater. Similarly, an estate and gift tax is currently assessed for a married couple’s estate of $10.98 million or greater, if they both die in the same year. These figures can be affected by whether the individuals made large gifts and other factors. However, in simple terms, these figures will generally trigger federal gift and estate taxes for 2017.
 
The IRS has increased these amounts for 2018. Next year, federal gift and estate taxes will be assessed on a single person’s estate of $5.6 million or more and for a married couple’s estate of $11.2 million or more, if the spouses die in the same year. This means an individual can leave $5.6 million to heirs and pay no federal estate or gift taxes, and a married couple can shield $11.2 million from estate and gift tax liability. 
 
For married couples, the 2018 rules for portability have not changed and still require a portability election on the estate tax return of the first spouse to die. The new 2018 figures will also apply to generation-skipping tax thresholds, so that an individual or married couple will not incur additional tax liability for leaving up to the threshold amounts in trust for grandchildren or later generations. 
 
Additionally, the IRS has increased the gift tax liability to $15,000 per year. For 2018, a person can gift up to $15,000 to another person in one year without incurring a gift tax. This is an increase from the amount of $14,000, which has been in effect since 2013. The rules have not changed, in that this gift amount of $15,000 can be doubled for married couples. In other words, a couple can give twice the amount to each child and could add in-laws, grandchildren, and others to the recipient list. 
 
As a reminder, these kinds of gifts are not prohibited; the gifts greater than $15,000 simply require a gift tax return.
 
While these changes will not affect every household in North Carolina, the adjusted numbers offer some people more flexibility in estate planning and in making gifts.

Kara Gansmann is an attorney in the Wilmington office of Cranfill Sumner & Hartzog LLP, where her practice encompasses elder law and estate planning. Kara advises individuals and families with estate planning needs and asset protection tactics. In this role, she strategizes with clients to preserve assets for long-term care and to leave legacy gifts to family members. Kara works with elderly clients in need of Medicaid crisis planning and Medicaid applications. As part of her practice, Kara drafts wills, trusts and powers of attorney. In the courtroom, Kara represents clients in the administration of estates, guardianship/incompetency proceedings, and guardianship administration. Kara also litigates estate and trust matters, including will caveats, the modification or termination of trusts, and litigation arising from estate documents or fiduciary roles. She is a member of the North Carolina Bar Association Elder Law and Special Needs Section and serves as co-chair of the CLE Committee for that section.  Kara also serves as a liaison between the North Carolina Bar Association Elder Law and Special Needs Section and the North Carolina Bar Association Estate Planning and Fiduciary Law Section.


 

Other Posts from Kara Gansmann

Wbj insights revised 0510 121615113531
Ico insights

INSIGHTS

SPONSORS' CONTENT
Michaelhiggins 41019104338

Oleander Memorial Gardens Offers New Final Family Resting Places

Michael Higgins - Dignity Memorial
Christy2

Is Your Roof Absorbing Water?

Christy West - Roof Rescue of Wilmington LLC/Roof Maxx
Sherrip2019 insights profile

That’s Who We Are

Sherri Pridgen - Cape Fear REALTORS®

Trending News

Realtor Submits Site Plans For Luxury Condos, Executive Office Center

Cece Nunn - Aug 22, 2019

Firm's Expansion Expected To Lead To New CRO Jobs In Wilmington

Cece Nunn - Aug 22, 2019

SummerFest 19 To Include Street Food Cook-off At Battleship Park

Jessica Maurer - Aug 21, 2019

Timeline In Motion For Castle St. Redevelopment Project

Christina Haley O'Neal - Aug 21, 2019

Drift Coffee  & Kitchen Now Open At Mayfaire 

Jessica Maurer - Aug 21, 2019

In The Current Issue

MADE: For Retailer, It's In The Bag

Find out more about Holly Aiken Bags, a company that creates handbags and accessories handmade in Wilmington and Raleigh....


Local Distillery Makes A Splash

With Brooke Bloomquist’s background in marketing and special events and her father’s naval career and business prowess, their masterminding...


Info Junkie: Girard Newkirk

CEO & Founder of KWHCoin, Girard Newkirk shares his top tech and informational tools....

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

WILMA's Leadership Accelerator
Power Breakfast - The H Word (June 13, 2019)
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`