Monday, January 25, 2021 Over the past twenty years, there has been a dramatic change in the Estate tax laws. Given the Democratic control established in Washington, D.C. this month, additional Estate Tax reform is now a distinct possibility. Currently, each person can give away during lifetime, or distribute at death, an amount of $11.7 million without being subject to federal Estate Tax. That high exemption amount may change under the Biden Administration. Now is the time to speak with your advisor about reducing or eliminating your exposure to Estate Tax.[1] Current Estate Tax Laws In 2001, the federal Estate Tax exemption amount [2] – the amount a person can gift during lifetime or transfer at the time of death – without being subject to Estate Tax was $675,000. The top Estate Tax rate was 55%. In 2010, the Estate Tax exemption was drastically increased to $5 million per person, subject to inflation increases, and the Estate Tax rate was dropped to 35%. The tax rate increased to 40% in 2013 and has remained at 40% ever since. Under the Tax Cuts and Jobs Act of 2017, the Estate Tax exemption was doubled to $10 million per person, subject to inflation. In 2021, each person has an exemption of $11,700,000. Due to the sunset of the Tax Cuts and Jobs Act, the exemption amount will drop to $5 million per person in 2026 unless the laws are changed prior to that time. Wisconsin does not have its own state estate tax, but some states do have a state estate, death, or inheritance tax.