2015 Estate & Gift Tax Update
A Legal Moment

2015 Estate & Gift Tax Update

   With the turn of the year come higher tax exclusions that may impact estates and annual gift giving.  It is a good time to begin planning your gifting for the year and to review your estate plan and beneficiary designations.

Estate Tax Exclusion Amount
   For 2015, the federal estate tax exclusion amount is $5.43 million per person (up from $5.34 million in 2014 thanks to an inflation adjustment).  This is also the current “unified exclusion amount” for the sum total of a person’s lifetime gifts that exceeded the applicable annual exclusion, together with the property passing to beneficiaries upon the donor’s death.  This figure also represents the current exclusion amount for "generating-skipping" gifts (e.g., gifting to grandchildren).
   There is currently no state inheritance, estate or gift tax in North Carolina.
Annual Exclusion Gifts & Spousal Gifts
   There is no change in the federal annual gift exclusion amount this year; it remains at $14,000 per donee.  This exclusion allows an individual donor to give an unlimited number of “annual exclusion gifts,” so long as the amount of the gift does not exceed $14,000 per donee during calendar year 2015.  (Generally, married couples can give $28,000 per donee as long as certain measures are taken.)
   Annual exclusion gifts do not use up any of a person’s “unified exclusion amount” (see above).  If you make a gift in excess of $14,000 to one donee, you may still avoid paying a gift tax on the excess by filing a gift tax return (IRS Form 709) and electing to use part of your unused unified lifetime estate and gift tax exclusion amount to cover the overage.  If you are married, you may avoid paying gift tax on excess amounts by having your spouse join in the gift up to a maximum of $28,000 per donee; a gift tax return may or may not need to be filed depending on specific circumstances.
   As in years past, a person may give an unlimited amount to his or her spouse by using the “unlimited gift tax marital deduction,” as long as the spouse is a U.S. Citizen.  If the spouse is not a U.S. Citizen, gift tax-free transfers to the spouse this year are limited to a “super annual exclusion gift amount” of $147,000, up from $145,000 in 2014. 
   Keep in mind that all annual exclusion gifts and spousal gifts must be gifts of a “present” interest as opposed to a “future” interest, and further qualifications can apply.  You should consult your tax advisor prior to making a particular gift.  A more detailed discussion of gift tax issues can be found in Gift Tax Basics, an article that I posted to this site last year.
Personal Update Reminder
   As you contemplate your gift plans for 2015, consider reviewing your life insurance and retirement plan beneficiary designations to confirm (1) that the designations are what you think they are, (2) that they continue to conform to your current wishes; and (3) that the designations are properly coordinated with your estate plan as spelled out in your Will or Revocable Trust.  And if you have not reviewed your estate planning documents (will, trusts, powers of attorney and health care documents) recently, you may also want to make sure they are up to date.
   Look for a discussion of beneficiary designations -- and common mistakes associated with them -- in an upcoming edition of “A Legal Moment.”

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Gay Vinson is an attorney at Marshall, Roth & Gregory, PC. Her practice is concentrated in trust and estate planning and administration.
  To receive more information on this topic or to suggest topics for future editions of "A Legal Moment," feel free to contact Gay by email ( or phone (828.281.2100). 

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     Other articles which may be of interest to you may be found in our Newsletter archives.

You may not rely on this content as legal advice for any specific situation, but should instead contact an attorney for specific advice.
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