Estate Tax Changes: A Window of Opportunity for 2024
As of 2024, individuals can transfer up to $13.61 million, and married couples can give away $27.22 million during their lifetime or at death without triggering federal estate taxes. This generous exemption is part of the current law, but it is set to expire in 2025. Starting January 1, 2026, the estate tax exemption could drop significantly, with projections estimating around $7 million for individuals and $14 million for married couples, after adjusting for inflation.
If Congress does nothing, the scheduled reduction will take place. However, Congress could intervene with new legislation to prevent the change, but there are no guarantees.
Why This Matters for Estate Planning
For now, the current exemption gives high-net-worth individuals and couples a rare opportunity. If you’re a married couple with assets worth less than $14 million, or an individual with less than $7 million, you’ll likely stay below the future exemption limits and avoid federal estate taxes. However, those with estates over $27 million (for couples) or $13.61 million (for individuals) are already in estate tax territory and should seriously consider estate tax planning.
For those in between—couples worth between $14 million and $27 million, or individuals worth between $7 million and $13 million—the next year will be crucial. You will need to closely monitor any changes Congress may make to the estate tax laws.
What You Can Do Now
While no one can predict exactly what will happen with the estate tax exemption, the current window offers a unique opportunity. If the exemption sunsets as scheduled, the reduced limits could expose more estates to a tax hit. For individuals and families with significant assets, estate planning now could help mitigate future taxes and preserve wealth.
Stay proactive. If your estate falls into these ranges, now is the time to consult with an estate planning professional and explore strategies to reduce your potential estate tax burden. The clock is ticking, and the landscape of estate taxes may change sooner than you think.
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