The federal estate tax threshold rose to $24.12 million in 2022 for married couples and $12.06 million for individuals, as part of the Tax Cuts and Jobs Act (TCJA). Like several TCJA provisions, the higher estate tax limit is due to sunset in 2025. Barring congressional action, the exemption amount will return to about $6.2 million, adjusted for inflation, in 2026. Similarly, the current 40% maximum gift and estate tax rate will increase to 45%.
For high-net worth individuals, this could influence wealth transfer strategies. Although this sunset is coming, the good news is that it's still a few years away.
And there's more good news: as financial professionals, we can help you with your estate strategy, regardless of whether Congress decides to maintain the current threshold. Estate planning is an essential piece of your financial plan and integrating the strategies and plans from your estate planning documents with your financial plan can help give a clear picture of your goals and desires. We would be happy to work with your current estate planning attorney or introduce you to one from our network if you are in need.
Now may be an excellent time to get together and start thinking about your post-2025 strategy.
Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.
The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.
Published for the blog on October 26, 2022 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.