Some people may need to update their estate plans in 2025.
Can you believe a new year is here?
Yikes!
I was just getting comfortable with 2024.
As always, the new year brings new beginnings.
Many people have hopes and are setting goals for the coming twelve months.
While some goals like reading a new book each month have little impact on others, others like reviewing or creating an estate plan can impact loved ones for generations.
According to a recent Cincinnati Business Courier article titled “5 key considerations for personal estate planning in 2025: An attorney’s perspective,” making estate planning a priority in 2025 benefits you and your loved ones.
What federal regulations and rulings might you need to address in your planning this coming year?
Estate planning is a meaningful goal for 2025.
The federal estate and gift tax exemption increased to $13.99 million from $13.61 million in 2024 to account for inflation.
These levels are set to expire on January 1, 2026, if no action to extend them is taken by the next Congress and President Trump.
With uncertainty about the future, those families affected by the exemption decrease would benefit from utilizing estate planning strategies in 2025 to avoid large estate tax liabilities.
The annual gift tax exclusion amount will increase by $1,000 to $19,000 this year.
What does this mean?
You can gift up to $19,000 per person to friends or family without requiring you to use up part of your lifetime exemption.
Married couples are allowed to gift $38,000 per individual.
This is a good option for seeing your loved ones benefit from your gift while you are alive while simultaneously reducing your taxable estate.
Your estate planning attorney will be able to advise whether you will want to file a gift tax form with the IRS for future planning.
Until December 26, 2024, the Corporate Transparency Act (CTA) required beneficial owners of businesses to file a beneficial owner information report.
The deadline for filing was January 1, 2025, for any company created before January 1, 2024.
For those companies founded in 2024, owners were required to file the report within 90 days of the business formation.
Even owners of single-member limited liability corporations (LLCs) needed to check with their attorneys about whether they were obligated to make a report.
But, whoa!
All that noted, hit the brakes (at least for now) until the court system confirms whether the CTA is yet in play, or has gone the way of the dodo bird.
All family-owned and small businesses require a success plan.
Any business success plan should align with your estate plan to provide a smooth transition for clients and employees while avoiding probate.
The Connelly high court decision addressed life insurance proceeds for business owners.
Specifically the questions was around whether these proceeds would be included in the value of the business for estate tax purposes.
What was the ruling?
The court ruled the insurance proceeds cannot be offset by the obligation of the company to redeem a deceased shareholder under stock redemption plan during the valuation of the company as part of the estate of the deceased owner.
If you own a business, you will need to review how your life insurance and succession plan are structured.
Whether these external factors or personal life changes impact your estate plan, reviewing your current documents in 2025 should be a priority.
This post is for informational purposes only and does not provide legal advice. You should contact an attorney for advice concerning any particular issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.
Reference: Cincinnati Business Courier (Dec. 3, 2024) “5 key considerations for personal estate planning in 2025: An attorney’s perspective”
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