Federal estate and gift taxes account for only 0.7% of all federal revenue. Changes made in estate tax rules by the Tax Cuts and Jobs Act will keep this percentage low through 2025 (unless Congress changes the law before then). Even so, estate and gift taxes continue to be a concern to many wealthy individuals. One of the key issues is what happens to estate tax planning now when the law changes in 2025 (or earlier).

Present Estate Tax Rules

A federal estate tax return for a decedent’s estate is required if the value of the estate exceeds a set amount. For 2019, the filing threshold is $11.4 million (Rev. Proc. 2018-57); for 2020, it is $11.58 million (Rev. Proc. 2019-44). The filing thresholds are the basic exclusion amount (BEA), which is adjusted annually for inflation. Estates below this amount are not subject to estate tax.