Looking Ahead: The looming expiration of the Tax Cuts and Jobs Act of 2017

By Alan Friedman

Alert … the lifetime gift and estate tax exemption will be cut in half on Jan. 1, 2026. That’s right, just 22 months to go!

Presently, the individual exemption amount stands at a substantial $13.61 million ($27.22 million for married couples). However, the looming expiration of the Tax Cuts and Jobs Act of 2017 (TCIA) provision on December 31, 2025 signals a drastic shift, with the projected exemption amounts dropping down to approximately $6.5 million per person and $13 million for married couples.

The anticipated cut in the federal exemption amount will increase the number of taxable estates, decrease the opportunity for individuals to  gift appreciating assets out of their estates and results in the need for more liquidity at death.

But wealthy families can mitigate those impacts by implementing an effective planning strategy before the sunset.

Now is the time to discuss with your affluent clients a proactive Wealth Transfer Planning Strategy that:

• Reduces their taxable estate by strategically moving future growth assets outside of the estate.

• Takes advantage of the current large lifetime exemption gift. 

• Ensures that there is liquidity to settle estate taxes

This is a great time to network with accountants and estate planning attorneys to look for opportunities to help their clients. And the PERFECT time to start talking to your clients. Watermark Life can help you with that conversation.

Always remember that Life Insurance is a way of insuring that there is plenty liquidity to cover estate taxes at the time of need.

Let’s have the discussion this week!