Tax Changes for 2018

Estate Tax Exemption and Gift Tax Exclusion

The new tax law (the Tax Cut and Jobs Act, Pub. L. No. 115-97) doubled the estate tax exemption from $5,000,000 to $10,000,000, which will then be further adjusted for inflation. It is predicted that the final exemption amount for 2018 will be $11,200,000 for individuals and $22,400,000 for married couples.

In addition, the annual gift tax exclusion amount was raised to $15,000 (from $14,000) for 2018.


ABLE Accounts

The new tax bill also made changes that effect 529 plans and ABLE accounts. An ABLE account is a tax-advantaged savings accounts for individuals with disabilities and their families. It is an option to save for disability-related expenses without putting federal means tested benefits at risk.

First, the ABLE account annual contribution limit, indexed for inflation, is raised to $15,000 from $14,000. Additionally, a transfer of funds between a 529 College Savings account and an ABLE account is now allowed without incurring any tax or penalty, as long as the same individual is the beneficiary of both accounts (or a family member of the individual is the beneficiary of the 529 account). This rollover is still subject to the $15,000 annual contribution limit.

Furthermore, ABLE account beneficiaries who are able to work may now personally contribute up to $12,500 of their own money directly to their ABLE account, over and above the $15,000 annual contribution limit for other donors. This additional contribution is subject to certain limitations; for example, the individual may not also make contributions to certain other retirement investments.

Finally, individuals with disabilities who make contributions to an ABLE account of which they are the beneficiary may now take advantage of the Retirement Savings Contributions Tax Credit.


Monahan Law Group, LLC handles complex estate planning, including special needs planning, transfer tax reduction techniques, charitable planning, and business succession planning. Attorney Margot Gordon is highly regarded in the area of complex estate planning and an author of the IICLE publication Estate Planning in Illinois Guardianships. Our estate planners focus on advising individuals, closely held businesses, and business owners regarding tax, estate, and business planning issues. In addition, Monahan Law Group actively works with guardians in disabled adult and minor guardianship matters to investigate and establish appropriate estate plans.

For more information about our estate planning practice, please visit our website or contact our office at (312) 419-0252.