Estate Planning in Times of Change: Part 1 of 2

With a new presidential administration onboarding, the estate planning landscape is shifting beneath our feet. If you've been waiting for the "right time" to create or update your estate plan, there’s truly no time like the present, which presents both opportunities and urgencies that demand attention. With anticipated changes on the horizon and favorable conditions that won't last forever, understanding your options has never been more critical.

In this two-part series, we’ll explore what we know for certain, what remains unclear, and most importantly - what you can do about it. Next week, we’ll look at strategies for protecting loved ones who may be especially vulnerable in the coming years. But this week, our focus is on taxes, interest rates, and asset protection. Let’s dive in.

What We Know About Taxes and Interest Rates

Here’s what we know for sure: The current estate planning environment offers some significant advantages that won't last forever. The estate tax exemption for 2024 sits at $13.61 million per person ($27.22 million for married couples) - the highest it's ever been. That number increases in 2025 to $13.99 million per person (or $27.98 million for married couples). This means you can transfer substantial wealth to your loved ones without triggering federal estate taxes. This creates a once-in-a-lifetime opportunity for many families to secure their legacy and protect their assets from future estate tax exposure.

However, we also know that this generous exemption is scheduled to sunset on December 31, 2025. Without new legislation, the exemption amount will drop significantly - to approximately $7 million - on January 1, 2026. This means that gifting assets out of your estate in 2025 could give you a $7 million opportunity to move assets that otherwise could be subject to estate tax rates that have been as high as in the past. When you are considering whether to gift assets out of your estate in 2025, remember to consider:

1. Not just the current value of your assets, but what they will grow to over your lifetime;

2. You can gift assets in ways that allow you to maintain aspects of control, and even use. Call me and let’s discuss.

3. The earlier in the year you get started on your considerations, the less expensive your planning will be, and the more likely we can get it done in time, so if you are likely to have an estate over $7 million in value at the time of your death, call me immediately to schedule. .

Pausing here for a moment, I want to point out something important: Your estate may be larger than you think. For tax purposes, your estate includes your home's fair market value (minus the mortgage) and any other real estate you own, life insurance policies, retirement accounts, investment accounts, and other assets. So, while you may have assets that total less than the $13.99 million exemption in 2025, you very well could be affected by the 2026 exemption. If you want to know for sure, I can help. Read on to find out how to book a call with me to find out.

Additionally, 2024 gift tax laws allow you to give up to $17,000 per person annually without triggering any tax consequences. For married couples, you could give up to $34,000 to each child, grandchild, or anyone else, to protect assets and pass them to your loved ones without tax liability. This is separate from the lifetime estate tax exemption and represents an additional tool for reducing your taxable estate. In 2025, the gift tax exclusion will increase to $19,000 per person.

Interest rates are another crucial factor. After a period of historic high interest rates intended to curb inflation, rates have finally begun to decline (though at the time of publishing, rates are fluctuating). Lower interest rates could make specific estate planning strategies particularly effective, especially if you want to transfer wealth to future generations. To learn more, book a call with me below.

Now that you’re clear on the current state of taxes, interest rates and asset protection, let’s shift gears and discuss what’s uncertain.

What Remains Uncertain We can anticipate changes with the new presidential administration and legislative session, but what those changes are is unclear. Different administrations often have vastly different approaches to tax policy, which can significantly impact estate planning strategies.

Here’s what we don't know:

1. Whether new legislation will freeze the current exemption and stop the estate tax exemption from dropping in 2026

2. How long interest rates will continue to decline

3. What changes might come to the gift tax exclusion and other wealth transfer tools

4. Whether state-level estate taxes might change in response to federal shifts How treatment of retirement accounts and inherited IRAs might evolve

5. Whether new restrictions might be placed on currently available planning strategies

With all this uncertainty, you may feel tempted to sit back and see what happens. However, waiting could mean missing out on valuable opportunities to protect your family's financial future. History shows us that when tax laws change, they often do so quickly and with limited opportunities to act before new rules take effect. So, the time to at least have a conversation and start the discussion is now.

Why You Need to Take Action Immediately

The combination of what we know and what remains uncertain creates a clear imperative: you should take immediate action.

Here's why:

Current Benefits: Today's high exemption amounts and declining interest rates create optimal conditions for transferring wealth. By acting now, you can lock in these advantages before they potentially disappear. Many of the strategies available today might be limited or eliminated in the future.

Future Protection: As your Personal Family LawyerⓇ firm leader, I help you create a properly structured Life & Legacy Plan that can help shield your assets from future tax changes. While we can't predict exactly what changes will come, we can build flexibility into your Life & Legacy Plan to adapt to various scenarios. This might include using specialized trusts, family limited partnerships, or other advanced planning tools that can provide long-term benefits regardless of how tax laws change.

Peace of Mind: Beyond tax considerations, creating a Life & Legacy Plan ensures your wishes will be honored and your loved ones protected, regardless of what changes come at the federal or state level. This includes ensuring your healthcare directives are current, your power of attorney designations are appropriate, and your asset protection strategies are robust. I also help you keep your plan updated over time so your plan always works - no matter who’s in office.

Family Security: As a Personal Family Lawyer Firm leader, I believe the real value of estate planning goes far beyond tax savings. It's about ensuring your family has the resources and guidance they need when you're no longer able to provide them. This includes protecting your children's inheritance, providing for family members with special needs, and ensuring your charitable goals are met.

Speaking of family members with special needs, check back next week; in Part 2 of this series, we'll explore specific strategies for protecting vulnerable family members and preserving family harmony through times of change. We'll discuss planning considerations for LGBTQ+ families, families with children who have special needs, and other situations requiring special attention in today's environment.

Your Next Steps

As your Personal Family Lawyer Firm leader, I understand that these changes and uncertainties can feel overwhelming. That's why I offer a Life & Legacy Planning® Session designed to help you understand exactly how these current conditions and upcoming changes might affect your family.

During your Planning Session, we'll:

1. Review your current estate plan (or discuss creating one if you don't have one)

2. Identify opportunities to take advantage of today's favorable conditions

3. Create strategies to protect your assets from future tax changes

4. Ensure your plan maintains flexibility to adapt to whatever changes come

Don't wait until the last minute to act. While tax considerations are important, the real value of estate planning lies in protecting your family and preserving your legacy.

Take the first step toward securing your family's future by booking a Life & Legacy Planning Session today: