The Impact of Recent Tax Law Changes on Estate Planning

Recent changes in tax law have significant implications for estate planning. This guide outlines the key impacts of these tax law changes on estate planning.

The recent tax law changes primarily affect estate, gift, and generation-skipping transfer (GST) taxes. Key changes include:

The exemption amount for estate and gift taxes has significantly increased. In 2024, the exemption is $12.92 million per individual, a notable rise from $11.7 million in 2021. This higher exemption allows for more wealth to be transferred without incurring federal estate or gift taxes. However, there is ongoing discussion about potentially reducing this exemption amount in the future.

How to Make the Most of the Increased Exemption

Here are several strategies you can use to maximize your estate planning benefits:

Lifetime Gifting: By making significant gifts during your lifetime, you can take advantage of the higher exemption, which reduces the size of your taxable estate and potentially lowers estate taxes. 

Spousal Lifetime Access Trusts (SLATs): This type of trust allows one spouse to create a trust for the benefit of the other spouse, utilizing the increased exemption while maintaining indirect access to the trust assets.

Adjusting Existing Estate Plans

Reviewing and adjusting your existing estate plan is a must due to recent tax law changes. You should make sure that your trust provisions take advantage of higher exemption limits and update your wills and other estate documents to reflect the current laws and your wishes.

Potential Challenges and Considerations

While higher federal exemptions offer benefits, be mindful of state estate taxes which may have lower exemptions, and consider the possibility of future legislative changes. It's advisable to work with an estate planning attorney to navigate these issues and keep your plan up-to-date.

The recent tax law changes have a profound impact on estate planning. By understanding the key changes, using the increased exemption, adjusting existing estate plans, and consulting with professionals, you can make sure that your estate plan remains effective and your assets are protected.

For more information, contact our office at Askew & Associates, P.A. by calling 954-546-2699.

Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns.