Are You Prepared for the 2025 Federal Estate Tax Exclusion Limit Sunset?
By Alison Pyott, CFP® CPWA®
When we look out on the estate planning horizon, many financial advisors and attorneys are now considering the implications of a potential sunset of the current lifetime exclusion for gifts and estates.
Passed in 2017, the Tax Cuts and Jobs Act (TCJA)¹ nearly doubled the current estate tax exemption amount to $12.92 million for individuals and $25.84 million million for couples.² However, lawmakers included a sunset provision that would bring the exemption amount back to pre-2018 levels on December 31st, 2025.³ It is unclear whether Congress will act to change or eliminate the sunset provision before then. If they don’t act, exemptions might decline to $7 million for individuals and $14 million for married couples and these estates could be subject to federal estate tax.⁴ The 2023 federal estate tax currently ranges from 18% to 40%.⁵
