Financial Education Center

The estate-applicable credit amount essentially allows you to transfer a certain amount of assets at death free of estate tax. The amount of assets you can transfer is known as the "Applicable Exclusion Amount" and is $11.58 million in 2020 ($11.4 million in 2019).

For lifetime transfers—i.e., gifts—the applicable exclusion amount is $11.58 million in 2020 ($11.4 million in 2019).

Beginning January 1, 2011, estates of decedents survived by a spouse may elect to pass any of the decedent's unused exemption to the surviving spouse. This election is made on a timely filed estate tax return for the decedent with a surviving spouse. See the instructions to Form 706 for additional information.

The value of assets excluded from estate tax were (are) as follows in 2010 through 2020:

SUGGESTION: Your estate plan should consider the increases in the applicable exclusion amount. Revisit wills and trust documents to determine if changes are required. Married couples should ensure that they have enough assets in their own names in order to take full advantage of the exclusion amounts, since even though an unused estate exemption is portable (transferable with an election to the surviving spouse) the GST exemption is not portable and any unused amount expires at the decedent's death. Further, there may be bona fide reasons to utilize a decedents entire estate tax exemption at death and where portability (transfer of a decedent's unused amount to a surviving spouses), for example to fund a trust to provide income and principal needs for a surviving spouse's and children's future needs, to protect assets from creditors, and to protect assets in the event of future marriages that may fail resulting in assets awards to unintended parties.

Transfer Tax Rate Schedule

In 2020 there is a flat rate of 40% on the amount of assets exceeding the exemption (same in 2019).

Estate-Applicable Credit Amount

IMPORTANT NOTE: Consult with your tax professional for an exact calculation of your estate tax liability.