The shorter days of fall and winter aren’t the only sunsets creeping up on people these days. If you’ve met with your estate planning attorney and tax advisors recently, you’re probably aware that the gift and estate tax exemption–the total amount you can leave to family and other beneficiaries during life and at death before the hefty federal gift and estate tax kicks in–is about to drop, rather precipitously.
Without legislation to prevent it, on January 1, 2026, the exemption will drop from $12,920,000 per person (that’s the 2023 exemption) to about half of that amount, depending on annual inflation increases. As the date gets closer, tax planning decisions get tougher. Make aggressive moves now to activate gifts to family members? Or hold out to see if legislation intervenes to prevent the sunset?
Understandably, some philanthropists are beginning to get concerned about what their legacy might look like when (and if) the exemption drops. Add to that uncertainty the fact that a person’s date of death is among life’s great unknowns, it’s no wonder that for the relatively few taxpayers who may be impacted by gift and estate taxes—at least for now—there’s both concern and confusion.
Here’s a quick review of the facts:
Here are a few strategies you might consider evaluating with your tax advisors now to advance your estate plan and your philanthropy plan:
As always, the team at the community foundation is here to help you navigate the opportunities and pitfalls presented by changes in the tax law. It is our pleasure to work with you and your advisors to maximize your charitable goals.
This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.
Comments are closed.-->