The federal estate and gift tax exemption has increased to $13,990,000 for 2024, offering significant planning opportunities for individuals seeking to reduce their estate tax liability. However, this exemption is scheduled to “sunset” on December 31, 2025, and return to pre-2018 levels of approximately $7,200,000, unless Congress takes action to extend or modify the current law.

In light of this looming deadline, many of my clients have asked about the potential impact of the recent election on this exemption. At present, most professionals—including myself—are advising clients to proceed with their estate planning under the assumption that the exemption will decrease at the end of 2025. With this in mind, now is the ideal time to consider strategies that allow you to take full advantage of the higher exemption before it expires.

One effective way to reduce estate taxes is through lifetime gifts and the creation of specialized trusts. By transferring assets now—whether outright to individuals or into trusts such as Spousal Lifetime Access Trusts (SLATs), Irrevocable Trusts for adult children, or Grantor Retained Annuity Trusts (GRATs)—you can utilize your exemption today rather than waiting until your death. These strategies can help transfer wealth to your heirs in a tax-efficient manner, reducing the taxable value of your estate.

Given the time-sensitive nature of this opportunity, I encourage clients to start their estate tax planning as soon as possible, ideally during the first half of this year. Starting early will provide ample time to implement thoughtful and well-structured plans before the December 31st deadline.

If you’re considering lifetime estate tax planning or have any questions about how recent changes may affect your estate, I invite you to reach out. Together, we can work on strategies tailored to your needs to ensure that you maximize your exemption and protect your legacy.

Let’s get started today.