How Three Families are Using the New $11 Million Estate and Gift Tax Break

The Tax Cuts and Jobs Act (TCJA) doubled the gift and estate tax exemption, giving those that needed it another $11 million to transfer tax free to the next generation or beyond. There are several different scenarios that can be benefited by the increase, as evidence by these examples:

• For those that have yet to use any of their gift tax exemptions, it means they have the full $11 million (or $22 million or a married couple). But that doesn’t necessarily mean that they have to use all of it.
• Christen Douglas, an estate lawyer with McDermott Will & Emery in New York, created a new trust for them where an individual trustee (a family member) has discretion over trust payouts. “The new exemption is really making people revisit their estate plans and think about what they can improve upon.”
• IA widow is using the new exemption to transfer $11 million worth of commercial real estate via an installment sale into a dynasty trust for her five grandchildren and their offspring. The trust doesn’t include her two daughters as beneficiaries; they’re already well-taken care of.

See Ashlea Ebeling, How Three Families are Using the New $11 Million Estate and Gift Tax Break, Forbes, August 31, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.