This is an interesting article from Forbes published earlier in the year (January 16, 2025) and written by Cody Barbo about estate planning and strategies for the coming year.
“The dust has settled on the recent presidential election, but its ripple effects are already prompting conversations about potential policy shifts—particularly in the realm of estate planning. Estate tax laws and related policies could significantly impact families, particularly those with larger estates. Here’s what to keep an eye on, what to expect and how to prepare your estate planning strategy in light of potential changes.
Understanding The Current Landscape Of Estate Taxes
Currently, the federal estate tax exemption sits at $13.99 million per individual ($27.98 million for married couples), set to sunset to approximately $7 million per person in 2026 unless Congress acts to extend the higher limits. This potential change could create a stark contrast in how estates are taxed, particularly for individuals with significant wealth.
For many, this issue revolves around timing. Will the current exemption amounts be preserved, or will they revert as scheduled? While the recent election didn’t bring immediate clarity, the absence of immediate urgency may signal a delay or de-prioritization of estate tax reforms under the new administration.
Regardless of the political climate, wealthy individuals must remain proactive. Estate planning strategies—particularly for those near or above the estate tax exemption threshold—should account for possible changes to avoid unnecessary financial burdens.
Implications For High-Net-Worth Families
If the estate tax exemption decreases in 2026, estates valued between $7 million and $13 million could face significant new tax obligations. Last year, only about 0.2% of the roughly 2.8 million individuals estimated to pass away were impacted by this tax.
This reduction would significantly increase the number of estates that are subject to federal estate tax, and it would also increase the tax liability for those who are already liable. Regardless of whether or not the law will sunset or be extended, there is a call to action for advanced planning.
For those affected, failing to act could result in taxable estates that trigger substantial federal tax liabilities. Families in this range may need to explore complex planning strategies, such as creating trusts, gifting strategies or leveraging tax-efficient financial instruments.
On the other hand, if the exemption remains at its current level, many individuals will continue to fall outside the taxable range, allowing simpler estate planning strategies to suffice. However, the lack of urgency doesn’t mean a lack of importance. Proper planning is essential for ensuring that your wishes are honored and your legacy is preserved.
The Role Of Technology In Modern Estate Planning
As estate tax laws evolve, technology will play a pivotal role in bridging gaps. With a finite number of estate planning attorneys available, scalable technology solutions can help meet demand, especially if the exemption amount changes and millions more Americans require estate planning assistance.
Online estate planning platforms can:
• Simplify estate plans for families with straightforward needs, freeing attorneys to focus on complex cases.
• Increase accessibility by providing intuitive, guided workflows that empower individuals to begin planning independently.
• Facilitate collaboration between clients and attorneys for seamless, hybrid planning experiences.
For high-net-worth individuals, partnering with technology providers or attorneys experienced in advanced estate planning can offer peace of mind and better ensure readiness for potential changes.
Preparing For The Future: Key Steps To Take Now
Again, even without immediate legislative changes, proactive estate planning remains crucial. Here’s how to get started:
Evaluate your estate.
Understand the total value of your estate, including real estate, investments, retirement accounts and other assets. If your estate nears or exceeds the potential lower exemption threshold of $7 million, more advanced planning may be needed.
Leverage current exemption levels.
Individuals or families anticipating significant tax exposure in 2026 may consider using strategies such as lifetime gifting to reduce taxable estate size while the higher exemption remains in place.
Work with professionals.
A qualified estate attorney or tax advisor can help navigate complex planning options tailored to your needs. For example, establishing irrevocable trusts or employing charitable giving strategies can help minimize tax burdens.
Use technology to simplify planning.
Estate planning platforms can help streamline foundational planning elements, including creating wills, trusts and health directives. These tools are invaluable for families managing simpler estates or as a first step before consulting with an attorney for more advanced needs.
Stay informed.
The legislative landscape can shift quickly. Keeping tabs on updates to federal estate tax laws ensures you’re not caught off guard when changes take effect.
Looking Ahead: A Balanced Perspective
Whether the federal estate tax exemption sunsets as scheduled, is extended or undergoes further reforms, the need for thoughtful, well-informed planning remains. Estate planning is about more than minimizing taxes; it’s about creating a legacy that reflects your values and protects your loved ones.
By staying proactive and leveraging the right tools and expertise, families can adapt to changing regulations with confidence. While political winds can shift from news cycle to news cycle, the principles of good estate planning—clarity, preparation and intentionality—are unwavering.
The recent election highlights the importance of staying prepared in an always-evolving landscape. Whether you’re new to estate planning or looking to refine an existing strategy, now is the time to take action. To that end, I believe technology can be used to your advantage to stay light on your feet. You can be empowered to review and update your estate plan at a moment’s notice.
Regardless of what comes next, having a well-crafted estate plan in place helps ensure you can move forward with confidence, knowing your loved ones and legacy are protected.”
I wonder if the author had any idea when he wrote “always-evolving landscape” just how “evolving” it would actually be. Probably not – but it certainly points out that all individuals, particularly those of considerable wealth, need to stay informed and be prepared to make changes in their plans. He is spot on, however, when he says the principles of good estate planning – clarity, preparation, and intentionality – are unwavering. If you would like to discuss your estate plan, now is a great time to do that. Call me at 513-399-7526 to schedule a meeting
or visit my website, www.davidlefton.com, for more information. I look forward to working with you.
Source: Forbes, 1/16/25 written by Cody Barbo