One of the most significant changes to the tax code brought about by TRA97 is the increase in the Unified Credit.

The Unified Credit is the amount of money each individual can give away, either at death or during your lifetime. For over a decade, the Unified Credit was set at $600,000, which essentially saved $192,800 of estate taxes. However, with TRA97, the Unified Credit schedule looked like this:

For Decedents Dying and Gifts Made During	Applicable Credit Amount	Applicable Exclusion Amount
1997	$192,800	$600,000
1998	$202,050	$625,000
1999	$211,300	$650,000
2000	$220,550	$675,000
2001	$220,550	$675,000
2002	$229,800	$700,000
2003	$229,800	$700,000
2004	$287,300	$850,000
2005	$326,300	$950,000
2006	$345,800	$1,000,000

With the Taxpayer Relief Act of 2001, some of these limits were increased even further. For more details, click here.

The new law also began increasing the annual $10,000 gift exclusion to account for inflation. It will rise with the annual inflation rate; however, there is a catch. Increases are only in thousand dollar increments, which means any increase in the gift exclusion may not happen for another couple of years.

The Taxpayer Relief Act of 1997 also provided extra estate tax relief for qualified family-owned businesses and farms. It created the new Roth IRA, which can provide extra tax benefits (especially for younger investors saving for retirement), as well as a wide variety of other changes.