Happy New Year

My last blog post of each year always provides updates on any upcoming estate tax law changes for the new year.  Before we get to the facts and figures, I just wanted to take a moment to wish all of you a happy new year and to say a sincere thank you to all of my clients and centers of influence for the continued trust that they place in me. The success of Canarick & Canarick is based on the relationships we have built over the years, and we really would not be where we are without you.  In addition, I would like to thank my incredible team (Amy, Allison and Katie) for all of their hard work to make this business run on all cylinders. 

With that said, I wanted to provide a few small updates for 2025…

• For an estate of any decedent dying during calendar year 2025, the applicable exclusion is increased from $13.61 million to $13.99 million. This change increases not only the applicable exclusion amount available at death, but also a taxpayer’s lifetime gift applicable exclusion amount and generation skipping transfer exclusion amount. This means that in 2025, a married couple could transfer up to $27.98 million to their children and grandchildren without the imposition of estate, gift or generation skipping transfer taxes.  As discussed in previous posts, however, it should be noted that the current estate tax law is set to expire at the end of this year, which would mean a reduction in the exclusion amounts to $5 million (plus adjustments for inflation).  Many believe that the incoming Congress and president will agree to extend the law.  We should know for certain sometime before the end of next year.  I will continue to keep everyone updated on any new tax law that may be passed under the new administration.
• The estate, gift and GST tax rate remains the same at 40%.
• The gift tax annual exclusion will increase from $18,000 to $19,000.
• The New York exclusion is scheduled to increase to $7.16 million (up from $6.94 million in 2024), and is scheduled to increase with inflation each year going forward. It is important to note that, unlike the Federal exclusion amount, the New York exclusion amount is not portable. This means that if the first spouse to die fails to utilize his or her full exclusion amount, the surviving spouse will not be able to utilize the first spouse to die’s unused exclusion amount.
• The New Jersey estate tax was repealed in 2018 and there has been little to no discussion about reinstating it.  New Jersey still does have an Inheritance Tax, but spouses and descendants (children, grandchildren, etc.) are not subject to it.   

As always, please feel free to reach out with any questions or to schedule a review of your estate plan.  

Wishing you and yours a safe, healthy, and prosperous new year! Cheers to 2025!

Best regards,

Michael Canarick