Good news for the wealthy or the particularly comfortable was just released by the federal government. In 2014, individuals in New Jersey and across the country will be able to add an extra $90,000 free from federalestate tax to the amount that they are allowed to transfer to a person during their life and at their death.
The new limits allow for up to $5,340,000 to be transferred without implicating the gift or estate tax. This is up from the $5,250,000 limit for gifts and estate transfers for 2013. Additionally, couples can combine the unused individual credit amounts by passing the unused portion to the other spouse, allowing the second spouse to transfer up to $10.68 million at his or her death. This is assuming that the credits had not been used during the couple’s lifetime.
Other tax changes are also on the horizon. For example, the annual exclusion for gifts to non-citizen spouses increased by $2,000, now at $145,000, and the foreign earned income exclusion is now $99,200, up from $97,600. The generation-skipping transfer exemption is now set at the new estate tax level. The amount of the gift tax exemption is the same as it was for gifts made in 2013 at $14,000. This amount is for individuals; for couples, the amount doubles. The new amounts for the exemptions will become effective Jan. 1, 2014.
New Jersey estate planning attorneys may be able to assist individuals with developing estate plans that minimize exposure to estate taxes. They may be able to inform clients of any anticipated taxes or changes in the tax law that could affect their estate plan or gifts they plan to give.
Source: CBS, “Higher limits for estate tax credits in 2014”, Ray Martin, September 23, 2013