Is Your Estate Plan Ready for 2025’s Tax and Political Shake-Up?

What’s On the Horizon:

In 2025, significant tax and policy changes are poised to impact estate and financial planning. The federal lifetime exemption amount (“unified credit”) has increased to $13.99 million per individual, with an annual gift tax exclusion of $19,000 per recipient. However, these elevated exemptions are set to expire at the end of 2025, potentially reverting the unified credit to approximately $7 million per person in 2026, unless Congress acts to extend them.​

The anticipated sunset of the Tax Cuts and Jobs Act (TCJA) provisions could also lead to increases in marginal income tax rates, a reduction in the standard deduction, and changes to the Child Tax Credit and state and local tax (SALT) deductions. These shifts underscore the importance of proactive estate planning.​

Additionally, recent legal developments, such as the reversal of certain reporting requirements under the Corporate Transparency Act, as well as recent case decisions on the use of intra-family loans, the transfer of real property, and buy-sell agreements, highlight the dynamic nature of the regulatory landscape.​

Given these impending changes, staying informed, attentive to detail, and guided by experience counsel remains at the core of effective long-term planning.