What’s New for 2024?

Will you be revising your estate planning documents in 2024? Or perhaps tackling your estate planning for the first time? If so, here’s what’s new and what’s the same in 2024:

• Federal Estate Tax. The federal estate tax exclusion amount is the amount that can be passed to heirs without triggering any federal estate or gift tax liability. In 2023, the federal estate tax exclusion amount was $12.92 million for individuals ($25.84 million for married couples). In 2024, that exclusion amount will be increased to $13.61 million for individuals ($27.22 million for married couples). As a result of these high thresholds, very few people face federal estate tax obligations. “Just 2,192 estates were subject to the tax in 2019, down from 51,159 at the turn of the millennium, and it raised just $14.6 billion, down from more than $35 billion in 2000, adjusted for inflation. Even among the elite, most estates today go untaxed.”

• Annual Gifting. Some people facing potential estate tax liability on either the federal or the state level choose to limit their exposure by making annual exclusion gifts. Please see this link for a more detailed explanation of how these annual exclusion gifts work. In 2023, you could make annual exclusion gifts in the amount of $17,000 per individual. In 2024, this amount has been increased to $18,000 per individual.

• Washington Estate Tax. Last year, I reported that the Washington estate tax exclusion amount would continue at its 2018 level of $2.193 million per individual. In 2024, that amount again remains the same. As Of Counsel Attorney Sherry Lueders explains in this blog post, the Washington legislature will need to act before this estate tax exclusion amount can be updated. For now, unlike the federal estate tax exclusion amount, the Washington estate tax exclusion amount is low enough to be an issue for many – particularly King County homeowners. The average price of a home is now $840,000, which is approaching half of Washington’s estate tax exclusion amount.

Do you have questions about how these 2024 changes (and non-changes!) might impact your estate planning? Please let us know. We’d be happy to help.