The federal gift, estate, and generation-skipping transfer (“GST”) tax exemptions are currently at an all-time high of $11.58 million per individual for 2020 ($23.16 million for a married couple). However, these increased exemption amounts won’t be around forever, so if you want to preserve the current $11.58 million, you would be wise to use your gift and GST tax exemptions in 2020.
Increased Federal Exemptions Are Temporary
The federal gift and estate tax exemptions allow an individual to make lifetime gifts or transfers at death (that would not otherwise qualify for a marital or charitable deduction or an exclusion—and so would be taxable) up to the exemption amount free of gift or estate tax. The two exemptions are “unified”; which means that any part of the $11.58 million exemption used to shelter lifetime gifts from gift tax reduces the amount available to shelter death-time transfer from estate tax.