Anticipate Upcoming Estate Tax Law Revisions

The clock is ticking down on a temporary increase to federal lifetime gift and estate tax exemptions. The Tax Cuts and Jobs Act (TCJA) of 2017 roughly doubled the amount of these exemptions, which 2023 allowed individuals to shield $12.92 million and couples up to $25.84 million from estate tax liability.

Unless Congress makes the change permanent, this provision will "sunset" on January 1, 2026, and the exemptions will revert to 2017 levels, adjusted for inflation—about half of what they are now. That might be around $7 million for individuals and $14 million for married couples. Estates valued above exemption levels may be taxed at a rate as high as 40%.

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This article first appeared on Fulcrum Wealth Advisor's blog at Prepare For Future Estate Tax Law Changes