Estate Tax Exemptions Update 2019

November 2018

Below is a summary of the federal estate tax, gift tax, and Minnesota estate tax exemption amounts for 2019. Please contact FMJ’s Trusts & Estates group (contact information below) if you have any questions regarding the status of the laws.

Federal Estate Tax Exemption

As of January 1, 2019, the federal estate tax exemption amount will increase to $11.4 million, up from $11.18 million in 2018, and up from $5.49 million in 2017. The top marginal federal estate tax rate remains at 40%.

These recent increases in the federal estate tax exemption amount are a result of the Tax Cuts and Jobs Acts (TCJA) passed in late 2017. Under the TCJA, the federal estate tax exemption doubled from 2017 to 2018 and will increase again come 2019 as a result of an inflation adjustment. It is important to note that these changes to the federal estate tax exemption amount are scheduled to sunset effective January 1, 2026. Under current law, this means that come 2026, the federal estate tax exemption amount will revert back to 2017 levels, as adjusted for inflation.

Annual Exclusion for Gifts

The annual exclusion amount for gifts in 2019 will remain at $15,000. The annual exclusion amount for gifts was $14,000 in 2017, and increased to $15,000 in 2018. This means that individuals can gift $15,000 to any person without incurring a gift tax or having to file a gift tax return (IRS Form 709). Any gift in excess of the $15,000 will reduce the federal estate tax exemption available at the time of death. For married couples, this means they could give up $30,000 to each child without having to file any gift tax return.

Minnesota Estate Tax

As of January 1, 2019, the Minnesota estate tax exemption amount will increase to $2.7 million, up from $2.4 million in 2018. Under current law, the Minnesota estate tax exemption amount will increase again in 2020 to $3 million. The top marginal Minnesota estate tax rate remains at 16%.

Next Steps?

Please contact the Trusts & Estates attorneys (contact information below) at FMJ if you have any questions about the 2019 estate tax exemptions or if you would like to discuss your estate planning questions.


About FMJ’s Trusts & Estates Practice

FMJ’s Trust & Estates group can help clients create and implement an estate plan in a time span that fits their needs. We make estate planning simple and affordable. Clients can email us at estateplanning@fmjlaw.com to have someone from our Trusts & Estates group contact them. We offer complimentary 30-minute initial consultations and flat-fee estate planning to fit every budget.

FMJ’s Trusts & Estates Group consists of  David Ness(Shareholder), Karen Schlotthauer (Senior Counsel), Matthew Jensen (Associate), and Nicole Flaherty (Associate). Follow FMJ’s Trusts & Estates Blog here