Review Estate Planning Before 2025 Sunset Provisions

Securing Your Future: The Crucial Importance of Estate Plan Review Before 2025’s Sunset Provisions

Published on by Wendy Holloway in Estate Planning

Securing Your Future: The Crucial Importance of Estate Plan Review Before 2025’s Sunset Provisions
  Reading time 5 minutes

As we enter the second quarter of 2024, it’s an excellent time to pause and reassess your financial landscape – including an estate plan review.

You might think that once an estate plan is established, it remains in effect indefinitely – but that’s not always true. Changes in laws and changes in personal circumstances may necessitate a review of your estate plan to ensure it remains aligned with your wishes and the prevailing legal landscape.

Sunset on the horizon

One significant reason to review your estate plan in 2024 is the looming sunset provisions set for 2025. These provisions, part of various tax laws and regulations, are scheduled to expire or undergo significant changes, potentially impacting estate planning strategies.

Biden’s FY2024 Revenue Proposals, released on March 11, 2023, explicitly lists “closing estate and gift tax loopholes that allow the wealthy to reduce their tax by using complicated trust arrangements to transfer their assets to their heirs.”

What’s changing…and what could drive more change

Tax laws governing estate planning, gift taxes, and inheritance taxes undergo frequent revisions by legislative bodies. Here are the changes that make a 2024 review of your estate plan crucial.

Evolving tax landscape

The impending sunset provisions of 2025 could usher in significant alterations to existing estate and gift tax laws, impacting estate taxation and wealth transfer. Potential changes may include adjustments to exemption thresholds, tax rate modifications, or new incentives or penalties.

A thorough review of your estate plan with a tax professional can uncover upcoming tax law changes that affect your plans, allowing for proactive adjustments to optimize tax efficiency.

Impending exemption changes

Numerous estate planning strategies hinge on specific exemptions and thresholds provided by current tax laws. Certain exemptions, such as estate tax exemptions or lifetime gift tax exemptions are set to sunset at the end of 2025 – which could impact your estate plan’s efficacy.

Evaluating upcoming exemption alterations is vital to adapting your plan and maximizing asset protection while minimizing beneficiary tax liabilities. For instance, a looming decrease in the estate tax exemption in 2025 may necessitate asset allocation revisions or the adoption of additional wealth transfer strategies.

Dynamic life events

Life’s fluid nature can mean significant changes in personal circumstances over time: Marriage, divorce, births, deaths, or health fluctuations can profoundly affect your estate plan and might drive changes to beneficiary designations, guardianship arrangements, or healthcare directives to reflect your evolving preferences and priorities.

Regular review ensures alignment of your plan with current family dynamics, financial status, and personal wishes.

Asset safeguarding

The value and nature of assets may fluctuate due to economic shifts, market conditions, or personal investments – a periodic review of asset protection strategies can help ensure their continued effectiveness in fulfilling your wishes.

Considerations may include insurance coverage adequacy, asset titling, or trust implementation for shielding assets from potential risks.

Legacy preservation

Estate plans encompass financial elements and provisions for charitable giving and family legacies. Updates or creation of charitable bequests, establishment of scholarship funds, or instructions for heirloom distribution can preserve your legacy for future generations.

Reviewing your plan reaffirms legacy goals, ensuring alignment with philanthropic intentions, family traditions, and cultural heritage.

On track and on target

Conducting a thorough review of your estate plan in 2024 is imperative to address potential tax law changes, exemption alterations, and personal circumstances before key estate and tax planning provisions sunset at the end of 2025. Proactive assessment and adjustments mean your estate plan continues to reflect your wishes and preserve your legacy for loved ones and charitable causes.

Take the next step

Get started with your 2024 estate plan review to ensure your legacy is protected and your wishes fulfilled as you intend – consult your estate and gift tax planning professional. If you have questions or would like to set up a conversation with our team of top estate planning pros, contact us today for a free consultation. As always, we’re here to help.

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If you think estate planning is only for the wealthy, you could be making a critical mistake. Get insights into why estate planning is for everyone. You might also be interested in learning more about trusts and trust structures, like the difference between a grantor trust and an intentionally defective grantor trust. And make sure you have a clear view of why trust analysis matters in tax planning – it can make a substantive difference.


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