Unlimited Love, Unlimited Transfer

Unlimited Love, Unlimited…

You gave your spouse your heart, but did you know that you can also give them unlimited gifts during your life or after your death that are free of gift and estate tax?

The “unlimited marital deduction” is an important tool for transferring substantial assets to a U.S. citizen spouse without incurring estate or gift tax liability. This differs from gifts to a non-spouse, which may be impacted by gift limits imposed by the IRS or estate tax.

In general, two U.S. citizen spouses are allowed unlimited gifts to each other, even at death. This provides great peace of mind and simplification from a tax and estate planning perspective. Any potentially applicable estate taxes would then be assessed on the death of the second spouse as part of their estate. Keep in mind, the 2024 estate tax threshold is $13.61 million per individual.

But what if you found love with someone who is not a U.S. citizen? In that case, if the spouse receiving the gift is a not a U.S. citizen, then this unlimited ability to make gifts is drastically scaled back. How much? Well, for tax year 2024, the first $185,000 gifted to a non-U.S. citizen spouse is not included in the total amount of the giver’s taxable gifts. This is a big step down from unlimited. Amounts gifted to a non-U.S. citizen spouse above the current $185,000 threshold are taxable and reportable on a gift tax return.

Estate planning can offer other valuable tax planning options. If you are concerned about the estate tax exemption or looking to establish or review an estate plan, don’t hesitate to call the attorneys at Wright Beamer at 248.477.6300. We are here to help.

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