We still don’t know if the significantly high estate and gift tax exemptions created by the Tax Cuts and Jobs Act will continue past its expiration date of December 31, 2025, says a recent article from MSN, “4 Strategies to Kickstart Your 2025 Estate Planning (and Why You Need to Start Now).” What we do know is that if you aren’t ready when the exemption drops to about half its current value, people who haven’t worried about estate taxes in recent years will see their legacies diminished.
Here are four strategies to consider preparing for the unknown:
Annual Gift Inclusion. Anyone can give any number of people as much as $19,000 per year without incurring federal gift taxes. Married couples can gift $38,000 to as many people as they want. This has two benefits: giving while you are alive to see the impact of your generosity and reducing the taxable estate.
Charitable Giving. If you are among the millions of Americans who support nonprofits, consider donating appreciated assets, like stocks, to the charity of your choice. Not only does this allow you to avoid capital gains taxes and receive tax deductions, but it also helps causes you care about.
Donor Advised Funds. DAFs are a good way to support charities in a general sense. If there’s no group or cause you want to support, the DAF allows you to gain tax benefits and recommend grants over time.
Review How Assets are Titled and Beneficiary Designations. Ask any estate planning attorney what happens when this step is neglected. Ensure that everything you own is titled properly so your best-laid plans don’t go awry. This includes funding trusts when assets need to be retitled.
A review of your accounts and life insurance policies should be conducted every few years to ensure that you aren’t surprising a long-forgotten best friend or ex-spouse with a generous gift. Beneficiary designations are not subject to provisions in your will, so be sure these two align.
The Details: Ensure that your important documents—including online account usernames, passwords, financial records and estate planning documents—are stored securely.
Don’t Wait to Update or Create Your Estate Plan. The onset of spring makes us want to be outdoors. However, proactively updating your estate plan, or creating one if you are really late for the game, can’t wait. Contact a local estate planning attorney to discuss protecting your assets, family and legacy.
To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.
Reference: MSN (March 26, 2025) “4 Strategies to Kickstart Your 2025 Estate Planning (and Why You Need to Start Now)”
