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
Jasonpathfinder3

What You Need to Know About SECURE 2.0 and Its Effect on Retirement Plans

Jason Wheeler - Pathfinder Wealth Consulting
Mcwhorter 0005

The Coastal Corridor is Helping Wilmington Startups With Connected Devices for Life Sciences Industry

Heather McWhorter - UNCW Center for Innovation and Entrepreneurship
Untitleddesign2 4523114356

Cybersecurity and Productivity: Striking the Perfect Balance for Business Success

Barrett Earney - EarneyIT

Trending News

City Club, Event Center On The Market For $7.5 Million

Emma Dill - Apr 16, 2024

Wilmington Tech Company Tapped For Federal Forestry Contract

Audrey Elsberry - Apr 15, 2024

Commercial Real Estate Firm Promotes Adams, Mitchell To Vice President Roles

Staff Reports - Apr 16, 2024

New Hanover Industrial Park To Get $3.3M In Incentives For Expansion, New Jobs

Emma Dill - Apr 15, 2024

Gravette Named Executive Director Of Nir Family YMCA

Staff Reports - Apr 16, 2024

In The Current Issue

Surgery Center Recognized By Orthopedic Organization

Brunswick Surgery Center recently received four certificates of excellence from accreditation organization DNV Healthcare....


Opioid Settlement Fights Epidemic

Local leaders in Wilmington and New Hanover County have been working together to allocate money from two nationwide opioid settlement agreem...


Area Attorneys Chosen For 2024 Legal Elite List

For the Business Journal's annual Law Issue, read about area attorney's who made this year's Legal Elite list....

Book On Business

The 2024 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2024 Power Breakfast: The Next Season