On December 20, Congress passed the Tax Cut and Jobs Act, the most sweeping tax reform since 1986. I am writing to mention a few highlights of the Act.

The estate, gift and generation-skipping transfer tax exemption will increase from $5,490,000 in 2017 to $11.2 million per person in 2018. The exemption will be adjusted

In a surprising move, the Tennessee legislature has repealed Tennessee gift taxes, effective for gifts made on or after January 1, 2012. This is welcome news for a lot of our clients who plan to make a $5.12 million gift later this year. Our clients have been considering various ways to make their gifts without paying Tennessee

The Tennessee legislature repealed Tennessee’s inheritance tax, effective as of January 1, 2016. This means that if you can survive until 2016, you will not owe any Tennessee inheritance taxes. If you die before that date, you will owe taxes if your taxable estate exceeds the following exemption levels:

2012

$1,000,000

2013

$1,250,000

2014

$2,000,000

2015

Over the last several years, several of our clients have changed their residences to Florida to avoid certain Tennessee taxes, including our inheritance taxes. Migration to avoid state inheritance taxes has also been occurring in other states.

Last week, the Wall Street Journal published an article about various states, including Tennessee, that are considering a repeal

A group known as Tennesseans Against Death Taxes is lobbying the Tennessee government to repeal Tennessee gift and inheritance taxes. Tennessee is one of only two states that charge gift taxes. Our state gift tax roadblocks a lot of good estate planning that could otherwise be done, with the result that families pay significantly more federal estate

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 authorized portability of the federal estate and gift tax exemption for married couples. This means that if one spouse dies without having used his or her entire exemption, the survivor may use it.

Portability has been widely hailed as a great estate planning benefit. The

This is the seventh article of a series dealing with the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“Act”). For the first six articles, see:

Part 1 – Charitable IRA Rollovers
Part 2 – Estate Tax/Carryover Basis Election for 2010 Decedents
Part 3 – Temporary $5 Million Estate Tax Exemption
Part