The Tax Cuts and Jobs Act substantially increased the gift and estate tax exemption. For 2020, the inflation-adjusted amounts are $11.58 million for individuals and $23.16 million for married couples filing jointly.
This creates a significant tax-saving opportunity for wealthy families. However, because the exemption amounts revert to their pre-TCJA level ($5 million and $10 million, adjusted for inflation) starting January 1, 2026, you can only give away substantial wealth gift-tax-free (either directly or in trust) for a limited time. However, there's a chance that Congress could change the rules or extend them.
What would happen if you took advantage of this opportunity now and later discovered you needed the money? That's where a spousal lifetime access trust can come in.