In 2021, a U.S. citizen may transfer up to $11.7 million to a non-spouse without federal estate tax. This amount is indexed for inflation each year through 2025. On January 1, 2026, this law sunsets, unless Congress and the President make this law permanent. If the law sunsets, the estate tax exemption amount will revert to 2017 levels when the estate tax exemption was $5.49 million per person. However, this amount will be indexed for inflation from 2018 through 2025.
Do You Still Need a Trust Now that the Estate Tax Exemption Amount is $11.7 Million?
Absolutely! Remember that your trust allows your beneficiaries to avoid probating your estate when you die. Attorneys’ fees and executor’s fees for probating an estate in California are set under Probate Code §§10810 and 10811 and are very costly. These fees increase with the value of your estate. For example, if you have a gross estate worth $1 million, the attorney and executor are EACH entitled to $23,000. In addition, Probate is a public and lengthy proceeding that your heirs will have to endure! The most efficient way of passing assets on at your death is through the use of a revocable trust.