How It Works
Each gift you make above the annual gift tax exclusion (currently $19,000 per recipient per year) reduces your remaining lifetime exemption dollar for dollar. You file IRS Form 709 to report it, but no tax is due until the exemption is exhausted. At death, anything left of the exemption shelters your estate.
The 2026 Sunset
Without further legislation, the exemption is scheduled to drop to roughly $7 million per person in 2026. Married couples should review their estate plan now, especially if combined assets exceed the future exemption. Strategies like SLATs, GRATs, and dynasty trusts can lock in the higher exemption before it falls.
Arizona Probate Claims Backdrop
Lifetime gifts can affect the size of the probate estate later subject to A.R.S. 14-3104 creditor claims, so timing matters.
For the broader picture — how the lifetime exemption fits with annual exclusion gifts, portability, and the GST tax — read our pillar guide: Estate, Gift & GST Tax in Arizona: The Complete Guide.