Estate planning is one of the most important steps you can take to protect your wealth and provide for your family’s future. And with major changes to estate tax laws on the horizon, now is the time to review your strategy and take advantage of current opportunities.
Whether it’s using today’s higher exemptions before they drop, making smart gifting moves, or adjusting your retirement plans, taking action this year can save you and your family a lot of hassle, and money, down the road.
Let’s explore some key strategies to ensure your estate is structured for long-term success.
1. The TCJA Sunset & Estate Tax Exemptions
Right now, the lifetime gift and estate tax exemption sits at an all-time high — $13.99 million per individual ($27.98 million for married couples). That means you can transfer up to that amount to heirs without paying federal estate taxes. However, when the Tax Cuts and Jobs Act (TCJA) expires in 2026, the exemption is expected to drop to approximately $6 million per person, cutting it nearly in half.
What does this mean for you? Your estate could be looking at a hefty tax bill (up to 40% on the excess) if it’s worth more than the future exemption amount. Use your exemption while it’s still high by making strategic gifts, setting up trusts, or leveraging other advanced estate planning techniques before the deadline hits.
2. Increased Gift Tax Exclusion for 2025
The annual gift tax exclusion has increased to $19,000 per recipient in 2025. That means you can give this amount to as many people as you like without dipping into your lifetime exemption.
You could use this increased exclusion to help fund a child’s education through a 529 college savings plan, contribute to a family member’s home purchase, or establish a charitable trust. By making tax-free gifts now, you not only support your loved ones but also reduce the potential estate tax burden in the future.
3. Ongoing Rules for Inherited Retirement Accounts
The SECURE Act changed the rules for inherited retirement accounts, and in 2025, these changes continue to have a major impact on estate planning. With the TCJA sunset on the horizon and, with it, potentially higher income tax rates, it’s more important than ever to plan for how these assets will be taxed when passed down.
To minimize the impact, consider Roth IRA conversions. While account beneficiaries must still withdraw the full balance within 10 years, Roth IRA withdrawals are tax-free, allowing them to avoid higher income taxes during peak earning years.
Note that eligible designated beneficiaries, such as spouses, may have different options for managing inherited accounts, but for most beneficiaries, the 10-year rule applies.
4. Estate Planning Document Check-In
When was the last time you updated your will and testament, trusts, or power of attorney documents? If it’s been a while, 2025 is the year to do it.
Ensure your documents align with your financial plan, current estate tax laws, and overall wealth management goals. Also, verify beneficiary designations on 401(k) accounts, life insurance policies, and pension plans; these will typically override the instructions in your will.
5. Preparing for Uncertain Tax Laws
While the lifetime tax exemption is set to drop in 2026, Congress could introduce changes at any time. To stay flexible, consider exploring tax strategies like spousal lifetime access trusts (SLATs), intentionally defective grantor trusts (IDGT), or strategic gifting to lock in today’s high exemptions. Stepped-up basis planning can also cut future tax burdens. Consider working with an estate planning expert to ensure you stay ahead of changing laws.
6. The Impact of Charitable Giving
If philanthropy is part of your wealth management strategy, 2025 is an excellent time to use charitable giving techniques to reduce your taxable income. Consider donor-advised funds (DAFs) for an immediate tax deduction, or charitable remainder trusts (CRTs) to provide income during your lifetime before transferring assets to your preferred charities.
7. Home Equity & Real Estate Considerations
With fluctuating interest rates and rising inflation, understanding your home equity, mortgage, and property tax liabilities is essential. Some estate planning strategies leverage home mortgage interest deductions or home equity loans to maximize liquidity while minimizing capital gains tax on real estate transactions.
8. Managing Digital Assets & Technology
In today’s digital age, estate planning must account for assets such as cryptocurrency, online banking, intellectual property, and even certain social media accounts. A structured digital estate plan should include instructions for managing these assets, securing passwords, and designating beneficiaries.
9. Working With Financial Experts
Estate planning is not a one-size-fits-all process, especially with changing tax laws, shifting cost of living trends, and evolving corporate tax policies. Working with an estate planning lawyer, tax planning professional, or financial planner with estate expertise can help ensure your plan remains adaptable to legislative changes.
Take Action Now to Protect Your Estate & Your Legacy
With tax laws changing and exemptions decreasing, now is the time to make strategic moves that will protect your wealth and your loved ones. Taking advantage of today’s higher exemptions, gifting opportunities, and tax-efficient strategies can make a big difference in preserving your assets for the next generation.
Don’t wait until the rules change to start planning. Schedule a consultation today and take the next step toward securing your financial future with confidence.
