Planning for the Sunset of the Estate Tax Exclusion

In 2024 the estate tax exemption increased to an astounding $13,610,000 per person. Married couples can exclude twice this amount. Lurking behind this extraordinarily high threshold is that, absent congressional intervention, this record-high amount will revert to $5,490,000, to be indexed for inflation, in 2026. Most clients and taxpayers will survive beyond 2026, which makes planning for the impending sunset crucial.

Experts believe that, indexed for inflation, the new exemption could be about $6.8 million, roughly half of the current exclusion. Many tax advisers and taxpayers have scurried to gift away amounts exceeding about $7 million in order to preserve the tax benefits of amounts gifted above this foreseen reduced threshold. However, this use-it or lose-it strategy is not advisable or practical for every estate and could jeopardize some taxpayers' ability to live out their lives comfortably.

There is an unwarranted presumption that portability eliminates the current need for estate planning for married couples. Although the estate exemption can be ported, a decedent cannot port his GST exemption. Many tried and true techniques exist that advisers can implement that will eliminate or reduce transfer taxes and provide the needed flexibility to survive constantly changing legislation.

Listen as our panel of trust and estate veterans recommends steps taxpayers should take to mitigate estate taxes and how these strategies can vary significantly based on the amount of assets projected to be held at death.

1. Estate tax exclusion
2. Sunset and exclusion adjustments
3. Use it or lose it
4. Weighing the economic sense of gifting
5. Portability planning
6. Basis step-up
7. Start with the basics
8. Hypothetical scenarios and examples

The webinar will address these and other critical issues:

• How estates can benefit from traditional estate planning techniques considering the impending sunset
• When clients should not rely on portability as an estate planning technique
• Which estates benefit from significant and immediate gifting?
• What should taxpayers not do in light of the reversion of the estate tax exemption in 2026?
• How spouses can coordinate their estate plans to circumvent transfer taxes

Learning Objectives

After completing this course, you will be able to:

• Identify assets that should and should not be gifted
• Decide how to implement basic estate planning strategies that provide flexibility for tax changes
• Determine the impact of the sunset of the current estate tax exemption on certain estates
• Ascertain which clients can benefit from immediate gifting of substantial amounts

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of estate, gift and trust taxation including various trusts types, the unified credit, and portability.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).