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Estate Tax Law Changes—and How You Can Navigate Them

Estate Tax Law Changes—and How You Can Navigate Them

April 12, 2024

By now, you've likely heard about the imminent changes to estate and gift tax laws set to take effect at the end of 2025 due to the sun-setting provisions in the Tax Cuts and Jobs Act of 2017. While Congress may extend some provisions, it’s important to understand that tax laws will likely undergo significant changes. These changes will particularly impact those with existing estates and wealth transfer strategies, which may no longer be effective in light of the potential alterations.

But there is good news! Fortunately, there’s still plenty of time to be strategic and proactive. There are several strategies individuals and families can consider amidst all the changes. If you think the estate tax sunsets might impact you, here are a few things to consider and discuss with your advisor to make sure you outline the most appropriate strategies for you. Remember, you have the power to shape your estate plan to your advantage.

  1. Consider creating a trust. Trusts offer many benefits, especially when it comes to wealth transfer. Given the estate tax changes, it’s possible to create an irrevocable trust that can’t be modified or terminated and offers tax benefits. For example, gifts to the trust can grow tax-free and be distributed to beneficiaries without federal estate taxes.
  2. Use gifting strategies. This year, you can give up to $18,000 per year to as many individuals as you want1. If you’re married, you and your spouse could also make these gifts separately, up to $36,000 per individual, before incurring any gift tax implications. Gifting now, under these limits, you can transfer some of your estate tax-free and avoid any estate taxes that might come at the beginning of 2026.
  3. Timing is everything. While your initial plan might have been to delay gifting to your heirs until your passing, it’s worth considering making some gifts now. If your lifetime gifting will exceed $13.61 million, gifting before 2026 will save on taxes and allow more time for investment growth. This means your beneficiaries may benefit more in the long run by receiving gifts earlier than anticipated2.
  4. Speak with a professional. Of course, we know this can be confusing to understand for some, especially given life’s other responsibilities. We can help guide you toward the solutions that will work best for you, your family, and your overall goals.

At Kore Financial Group, we believe in keeping clients informed and educated about any changes to laws or other regulations that might impact their plans. Contact us, and we can help review how these changes may affect your estate plan.

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