INSIGHTS
IMPORTANT UPDATE:
Upcoming Changes to Estate & Gift Tax
by Kevin DeYoung, CPA, AED, Chad VanDyken, CPA, CFP®, and Marv Tjoelker, CPA, CFP®
ARTICLE | October 2, 2024
The following information provides an overview to changes in tax laws that could significantly impact your estate planning. With several key tax provisions set to expire at the end of 2025, we strongly recommend that you review your estate plan now to ensure your loved ones are protected and minimize potential tax liabilities.
What’s Happening?
Key tax provisions that were put in place by the Tax Cuts and Jobs Act (TCJA) of 2017 are set to expire at the end of 2025 unless Congress acts to extend these provisions.
Estate and Gift Tax Exemption Reduction:
Current Law: The estate and gift tax exemption is approximately $13.61 million per individual in 2024, meaning you can pass on this amount without incurring federal estate taxes.
What Happens in 2026: The exemption will drop to roughly $7 million per individual (adjusted for inflation), exposing more estates to federal estate taxes.
What Does This Mean for You?
Higher Estate Taxes: If your estate is above $7 million (or $14 million for married couples), your heirs could face significant federal estate taxes. For instance, an individual with a $12 million estate may have a federal estate tax liability of around $2 million in 2026 compared to zero federal estate tax today.
Reduced Gifting Capacity: You may not be able to gift as much to your loved ones without incurring tax liabilities. Gifting $10 million today would reduce your taxable estate, but that same gift could exceed the exemption in 2026
What Should You Do Now?
We highly recommend you begin by reviewing your estate plan and take advantage of current exemptions. It should be noted that this process can take time, so please act now! We are here to help, so please reach out to your Larson Gross advisor today and schedule time to meet and discuss next steps.
General questions? Please review this handout or reach out to us at 800.447.0177.
If you are in either the Bellingham or Lynden area, feel free to join us at one of our two FREE upcoming Estate Planning events, Securing Your Legacy: Essential Estate Planning Strategies coming this November. Learn more and register below:
Kevin DeYoung, CPA, AEP
Partner
Kevin De Young joined Larson Gross in 1994 after earning his Bachelor of Science degree in accounting from Calvin College in Grand Rapids, Mich. He became a Partner of the firm in 2008.
Chad VanDyken, CPA, CFP®
Senior Manager
Chad VanDyken joined Larson Gross in 2015. He holds a degree from the University of Hawaii at Manoa, where he double majored in Accounting and Finance with a focus on personal financial planning.
Marv Tjoelker, CPA, CFP®
Partner
Marv joined Larson Gross in 1983 and has been a partner of the firm since 1994. He previously served as Larson Gross’s Chief Executive Officer and Chairman of the Board. Today, he sits on the firm’s Governance Committee and serves as part of the GET Wealth team.