In sum, the law allows qualifying taxpayers to shield more of their assets from estate taxes upon death as compared to pre-2018 levels. However, the window of opportunity to leverage the tax benefits is relatively small, so individuals and couples should act right away to adjust their estate plans for optimum effect.
Over the coming years, the exemption amount will be raised according to inflation rates. The current version of the law sets an expiration date of 2025 for this threshold amount, at which point it may go back to the pre-2019 estate tax exemption level of $5 million.
“It’s absolutely essential to take advantage of the higher level right now, well in advance of the sunset date in 2025. Planning around fluid gift and estate tax laws means you need to act in the moment, since things could change overnight. Statutes like the TCJA can change with fluctuations in the political climate, budgeting, and market conditions. You might think you have time to create an estate plan that shelters as much of your assets as possible, but beneficial tax laws could be gone tomorrow.”
“Clients will often tell me that they fear losing control over the business by prioritizing the estate plan. Or, at the other extreme, they maintain such a tight grip over company interests that they overlook succession planning.” He had these tips for individuals in such a position: