Although there is a lot of conversation and worry regarding the issue, estate and gift taxes do not affect most households.
In Ohio, there is currently no estate taxes for state taxation purposes. The Ohio estate tax was repealed effective January 1, 2013.
There is a federal estate and gift tax that is 40% on assets subject to the tax; however, there is a large exemption that covers the average household.
The estate and gift tax exemption is the amount of money that can be transferred without having to pay estate taxes. For 2023, the estate and gift tax exemption is $12.92 million individual, and $25.84 million for a married couple. There will likely be a substantial reduction at the end of 2025. Unless new legislation is passed, the estate and gift tax exemption is scheduled to sunset back to the 2017 exemption amount (indexed to inflation), and will be approximately $7 million per individual, and $14 million for a married couple, depending on inflation over the next two years.
If your wealth exceeds your available estate and gift tax exemption, there is an opportunity to make gifts using the higher exemption amount prior to the sunset. For individuals or couples close to the exemption amount after the sunset, it makes sense to explore options in order to try to avoid making the federal government a beneficiary of your estate.