A client from Orland Park recently inquired regarding the 2024 lifetime exemption amounts for gifts and transfers at death. The update is that the lifetime exemption for gifts and transfers at death has been increased in 2024 to $13.61 million (up from $12.92 million for 2023).

What this means in broad terms is that a person can gift up to $13.61 million during his/her life or transfer that amount upon his/her death without paying federal gift or estate taxes.

The increase was automatically made pursuant to an inflation factor built into the Tax Cuts and Job Act of 2017. However, the “generous” tax exemption is due to expire December 31, 2025. At that time the exemption is expected to be reduced to close to $6 million (unless Congress takes action to change the amount).

The Illinois exemption for estate taxes remains at $4 million.

The annual exclusion for gifts has also been increased to $18,000 per recipient/donee for 2024 (up from $17,000 for 2023). That is the maximum amount any person may gift to another in 2024 without anyone having to pay tax or file a tax return. The annual gift does not reduce the lifetime exemption amount.