Countdown to Sunset 2025: Planning in the Face of Scheduled Changes in the Law

Legacy Planning, Once Removed

A significant change in tax law is scheduled to occur at the end of 2025: effective January 1, 2026, the estate, gift and generation-skipping transfer tax exemptions, currently $10 million per person (to be indexed for inflation), are scheduled to be cut in half, to $5 million (to be indexed for inflation). Starting in 2026, the ability for individuals to make tax-free gifts is scheduled to effectively be cut in half.

Many clients are concerned about this scheduled change in the law, and they are considering whether and how to take advantage of current law while they can. This episode provides a brief summary of the scheduled change in the law, some potential solutions, and some disadvantages or pitfalls to keep in mind. As Steve summarizes, it is best to start that conversation now, well in advance of the 2025 deadline.