It may be time to start worrying about the estate tax

Monday, April 5, 2021

Amanda DiChello was quoted in El Paso Inc. discussing the impact federal estate tax could have on individuals. Under current rules, the federal estate tax won’t ever affect you unless you’re quite wealthy. But that could change rapidly, even if you are far from rich. Proposals under consideration by President Joe Biden could extend the tax to millions of people. If the rules were to change and you gave $5 million today, and the permitted exemption level dropped from $11.7 million to $3.5 million next year, you could no longer make tax-free gifts. That’s the way changes in the tax code have traditionally worked, said Amanda. “There’s no carry-over that would have been left as a result of a prior administration or prior tax code,” she said. “The only thing that is portable is if you had a spouse who died when the exemption was higher.”

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