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Gift and Estate Exemption Clock Ticking for 2 Million Families

HNW clients need to start thinking about moving their assets.


The expiration of generous lifetime estate and gift tax provisions by the end of 2025 has put pressure on high-net-worth (HNW) clients and their advisors to initiate asset transfers out of family estates. With the possibility of exemptions reverting to 2017 levels, potentially halving current limits to around $6.5 million for individuals and $13 million for married couples, an estimated 2 million wealthy U.S. families could face estate taxes exceeding 40%. This impending change urges families to act swiftly and strategically in moving assets out of their estates before the deadline.


Estate planning involves careful consideration of asset transfers, choice of jurisdiction for trusts, and utilization of techniques like discounting through limited liability companies or partnerships. The planning process demands time and collaboration among various professionals, including estate planners, appraisers, attorneys, and accountants. Delays in initiating planning could result in missed opportunities and increased tax liabilities, especially given the complexity and time-intensive nature of executing asset transfer strategies.


Proactivity is key in navigating the complexities of estate and gift planning, particularly given the potential shortage of qualified practitioners and the anticipated increase in IRS scrutiny on HNW taxpayers. Educating clients on the importance of early planning and engaging a knowledgeable team to quarterback the process are essential steps in mitigating tax exposure and ensuring clients' long-term financial security amidst changing legislative landscapes and evolving wealth transfer dynamics.



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