2022: Changes in the Tax and Estate Planning Area

2022 has brought some changes in the Estate Planning and Tax area. Visit our Blog at www.themcnamaralawfirm.com for more information, but here two that my clients always find interesting.
2022 Gift Tax: My clients often want to give gifts to their kids, and are concerned that either they, or their child, will have to pay tax. The giver can now give $16,000.00 per person per year (up from $15,000.00 in 2021) without paying tax or filing a gift tax return with the IRS. The recipient of the gift does not pay tax.
If the gift is OVER $16,000.00, you don’t pay any actual tax until your lifetime gifts exceed $12.06 million (the new 2022 estate tax exemption). If you do gift over $16,000.00, you are required to file a gift tax return (with no tax due) to keep track of how much of that $12.06 million you have used up.
2022 Federal Estate Tax: Many clients ask about “estate tax”, also referred to as “inheritance” tax. The amount of money you can leave to your beneficiaries after you pass, without paying estate tax, is called the “estate tax exemption”. This exemption has now increased to $12.06 million per person in 2022, so most no longer are concerned with estate tax.
If you have had changes in your life (marriage, divorce, death of a spouse or parent, changes in your “trusted” people you previously named in your trust or other legal documents), I encourage you to review your estate plan. Just like changes in the law, changes in life happen regularly, and these changes often require revisiting your estate plan.
For more information, please contact the McNamara Law Firm at (661) 287-3260, or visit www.themcnamaralawfirm.com.