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Caring For Generations

Generational Opportunity for Only a Few; a Wake-up Call for Many

by | Nov 15, 2023 | estate and tax planning, Estate Planning, estate planning documents, estate planning in Indiana, estate planning lawyer

“The amount of exemption is considered ‘generational opportunity’, a recent Indianapolis Business Journal article noted, referring to the impending end of the estate tax provisions of the 2017 Tax Cuts and Jobs Act (which had doubled the exemption amount for paying estate tax). The current estate tax exemption is $12.92 million per person and is set to increase in 2024 and 2025, but the current law is set to expire on December 31, 2025, and if Congress does not act, the exemption will be reduced to $5 million per person adjusted for inflation. Planning opportunities exist while the exemption amount remains high and should be considered for high net worth clients.

True, as we had noted in our Geyer Law blog just a few weeks ago, for most, the estate tax continues to be a non-issue – for the vast majority of the U.S. population, even after affected. The reduction in the exemption will impact only a small minority of our Geyer Law estate planning clients.

Still, for those with significant estate assets, the coming months will very possibly prove to be a once-in-a-lifetime opportunity to pass significant wealth to children, grandchildren, and charities. For everyone, we can’t help noting, the attention being called (by articles in the press such as the one in IBJ) to the impending estate tax exemption “sunset”, is a positive, reminding all that the earlier estate planning discussions take place, the smoother the transition of wealth will be from generation to generation.

In the IBJ discussion, Aaron Wealth Advisors CEO Gary Hirschberg offered an important caution: “People need to carefully consider how much they can afford to give, because,, “if they use their full estate tax exemption now by giving the money away, they might not have enough to sustain their current lifestyle.”

That statement really resonates with our estate planning attorneys at Geyer Law. Estate planning needs to emphasize the you, meaning that it is the process of putting your affairs in order so that you, not only your loved ones, are taken care of, your obligations discharged, and your assets distributed and used in ways of which you approve, should never be all about tax considerations.

For the few, the impending sunset of the existing estate tax exemption will undoubtedly prove a once-in-a-generation opportunity, but, for everyone, the “buzz” should serve as a wake-up call, a reminder to put estate planning on the schedule.

– by Rebecca W. Geyer