The estate and gift tax exemption is $12.92 million per individual in 2023. That means an individual can give $112.92 million to others during life or at death and pay no federal gift or estate tax, while a married couple will be able to transfer $25.84 million. The annual gift exclusion amount is $17,000. The $25.84 million number per couple isn’t automatic. An unlimited marital deduction allows you to leave all or part of your assets to your surviving spouse free of federal estate tax. But to use your late spouse’s unused exemption – a move called "portability"—you must elect it on the estate tax return of the first spouse to die, even when no tax is due. If you do not file the return, the portability is lost. Further, if the surviving spouse remarries, the portability is also lost. The estate and gift tax rate for estates valued over this amount is 40%. The generation skipping transfer tax is also 40%. These unified exemptions will continue to be indexed for inflation in later years, but the 12+ million exemption sunsets at the end of 2025. Special planning will be required for generation skipping trusts. While the estate tax exemption has been made portable between married couples, the generation skipping transfer tax exemption has not. This means that in order for married couples to take advantage of both spouses' generation skipping transfer tax exemptions, special planning will be required in married couples' estate planning documents.

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