By Aaron Middleton
The federal estate, gift, and generation-skipping transfer tax exemptions will be cut in half.
Many individuals and businesses have paid less in taxes since the Tax Cuts and Jobs Act of 2017 (TCJA) was signed into law in December 2017. If you’re not familiar with the TCJA, it doubled the federal estate, gift, and generation-skipping transfer tax exemptions, lowered income tax rates, and more.
Most of these benefits are scheduled to sunset, or come to an end, on Jan. 1, 2026. Here’s what you should know:The TCJA doubled the estate, gift, and generation-skipping transfer tax basic exclusion amounts to:
$10 million per person, indexed for inflation. In 2024, the amount is equal to $13.61 million.
$20 million per married couple, indexed for inflation. In 2024, the amount is equal to $27.22 million.On Jan. 1, 2026, the exemption amount will revert to: $5 million per person, adjusted for inflation, or $10 million per married couple, adjusted for inflation.
What should you do now? Make sure your strategy meets your needs and you’re ready for 2026 and beyond. Use this checklist to get started.
EXPLORE TAX REDUCTION STRATEGIES
Gifting • Trust planning • Charitable planning
CONSIDER WHERE YOU WANT YOUR ESTATE TO GO TO WHEN YOU DIE
Your heirs – This isn’t guaranteed unless it’s planned appropriately. Charity – This must be purposely established. Taxes – Without a strategy, taxes are likely.
DO YOU THINK YOUR ESTATE IS TOO SMALL TO WORRY ABOUT THIS?
What will it be worth in five, 10, or 20 years at a mere 4% growth rate? See chart below. To discuss your unique situation and how this tax law sunset may impact you, please contact me for a comprehensive consultation at no cost or schedule time on my calendar at www.prudential.com/advisor/aaron-middleton.
YEAR
0
5
10
20
TODAY’S ESTATE VALUE $3 MILLION
$3,000,000
$3,649,959
$4,440,733
$6,573,369
$5 MILLION
$5,000,000
$6,083,265
$7,401,221
$10,955,616
$8 MILLION
$8,000,000
$9,733,223
$11,841,954
$17,528,985
Aaron Middleton Financial Planner | Prudential CA Insurance
License #4063414
Office: 813-520-4129 | Mobile: 727-212-6080
Email: aaron.middleton@prudential.com
5666 Seminole Blvd., Suite 142Seminole, FL 33772
