Estate Planning Considerations for 2025 and Beyond

As we move through March 2025, assessing our estate plans in light of potential changes to the federal estate tax exemption is critical. The current exemption, standing at about $14 million per individual in 2025, is set to sunset on December 31, 2025. This means that any estate planning decisions made after this date could be subject to a lower exemption, potentially reverting to pre-2018 levels of approximately $7 million per individual, adjusted for inflation. This impending change makes 2025 a crucial year for estate planning, as it could significantly impact the tax implications of your estate.

Here are key strategies to consider:

1. Lifetime Gifting: The Wall Street Journal reports that the historically high exemption presents an ideal opportunity for substantial lifetime gifts. Gifts made before the sunset are irrevocable and won't be "clawed back" if the exemption decreases after 2025.

2. Irrevocable Trusts: Forbes suggests these provide a powerful mechanism for transferring assets out of your taxable estate while maintaining some control over their management.

3. Spousal Lifetime Access Trusts (SLATs): As noted by Kiplinger, these allow one spouse to gift assets to an irrevocable trust for the benefit of the other spouse and their descendants, providing both tax advantages and flexibility.

Digital Assets and Your Estate: What You Need to Know

In our increasingly digital world, including digital assets in your estate plan is crucial. These assets can include everything from online financial accounts and cryptocurrencies to social media profiles and digital photos.

Here are some key considerations for digital estate planning:

1. Create a comprehensive inventory of your digital assets. The National Law Review recommends this should include all online accounts, cryptocurrencies, and digital content.

2. Establish access protocols. CNBC advises using strong passwords and two-factor authentication to secure your digital assets and considering a password manager to store this information securely.

3. Designate a digital executor. According to Investopedia, this should be someone tech-savvy who can manage your digital assets after your death. Their role is to ensure that your digital assets are managed and distributed according to your wishes, as outlined in your will or trust. This could involve closing online accounts, transferring ownership of digital content, or preserving your digital legacy.

4. Include digital assets in your will or trust. The American Bar Association emphasizes specifying how you want these assets to be managed or distributed.

5. Consider using a digital legacy service. TechCrunch reports these platforms can help preserve your online presence and manage your digital assets posthumously.

Remember, laws governing digital assets are still evolving. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) provides some guidance. However, as the Estate Planning Law Journal notes, staying informed about changes in this area is not just important, but crucial for successful estate planning.

As we navigate the complex landscape of estate planning in 2025 and beyond, it's clear that a comprehensive approach that includes both traditional and digital assets is essential. By taking these steps now, you can ensure that your legacy is preserved, and your wishes are honored, both in the physical and digital realms.

Disclaimer:

The information provided in this article is for general informational purposes only and does not constitute legal, tax, or financial advice. This content is not intended to be a substitute for professional advice. Always consult with qualified legal, tax, and financial advisors before making any decisions regarding estate planning or investments.

The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency or organization. Any forward-looking statements are based on current expectations and projections about future events and are subject to change without notice.

Estate planning laws and regulations are subject to change. The information presented here is current as of March 2025 but may not reflect the most up-to-date legal or regulatory changes. Readers are encouraged to verify any information directly with primary sources and to stay informed about any changes in applicable laws and regulations.

Investments mentioned in this article involve risks and may not be suitable for all investors. Past performance is not indicative of future results. The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested.

Sources

1. IRS Estate and Gift Tax: https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes
2. American Bar Association Estate Planning: https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/
3. Forbes Estate Planning Strategies: https://www.forbes.com/sites/martinshenkman/2025/03/01/2025-estate-planning-update-strategies-to-consider-now/
4. National Law Review Digital Assets: https://www.natlawreview.com/article/digital-assets-estate-planning-what-you-need-know
5. CNBC Estate Planning: https://www.cnbc.com/2025/03/15/estate-planning-in-2025-what-you-need-to-know.html

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