The Tax Cuts and Jobs Act of 2017 made one significant change for estate planning: it doubled the estate tax exemption through 2026.
This change is unique because it has resulted in the highest estate/gift exemption ever allowed (basically double of what we had in 2017), but there is a catch – you have to use it in the next eight years, as it goes away in 2026.
Therefore, now is the ideal time to reevaluate your estate plan, or if you don’t have one, to get to work on it.
This exemption is truly a “use it, lose it, or die with it” proposition. For example, a couple with a net worth today of $8M (married filing jointly) would not have any estate tax liability during the next eight years according to the Tax Reform legislation passed in December. If we can assume modest growth of their estate (6%) and the exemption indexed for inflation, they would have an estate tax liability once the legislation sunsets at the end of 2025.
This is a unique opportunity to use what has been given for a short period of time, and it’s recommended that anyone with, or considering, an estate plan double down on these tax advantages while they can.
K·Coe Isom is ingrained in the intricacies of strategic estate planning and gifting in conjunction with building historic legacies. Contact us today to establish an advantageous estate plan for your business and family.