New Laws Open 6 Estate Plan “Wormholes” & Why You Should Revisit Your Plan Right Away
Law changes have created incredible estate planning opportunities for savvy Americans. However, the massive changes may have made many estate strategies outdated.
If you haven’t created or reviewed your estate plans in light of these new rules, you’re at risk of…
- Accidentally disinheriting your spouse (because of an outdated trust or estate strategy)
- Failing to take advantage of a temporary tax window (just through 2025)
- Shortchanging your loved ones by leaving Uncle Sam too much of your hard-earned money
- Forcing your loved ones to liquidate their inheritance to pay taxes (because IRA rules changed)
All because your will, trust, or estate plan hasn’t been updated to reflect the new laws.
Right now, you’ve got a limited window (just until Dec. 31, 2025 or maybe sooner if lawmakers take these opportunities away) to take advantage of the possibilities introduced by recent laws.
Inside, you’ll find the top new opportunities and the shocking changes that may put estate strategies at risk… PLUS a simple checklist to help you clarify your situation and the exact next steps you need to take.
MAKING THE MOST OF NEW OPPORTUNITIES (AND AVOIDING THE NEW PITFALLS)
1. DON’T ACCIDENTALLY DISINHERIT YOUR SPOUSE!
Plans created prior to 2017 often included formulas based on old federal estate-tax exemption amounts (as low as $675,000 in 2001).1 A consequence of an outdated strategy could accidentally pass your entire estate to children or heirs, leaving your spouse with nothing.
Your next step: Do you have a dangerously outdated estate strategy that leaves your spouse or loved ones at risk?
2. YOU AND YOUR SPOUSE CAN GIVE DOUBLE TAX-FREE
Current laws doubled the federal estate and gift tax exemption through Dec. 31, 2025 (it’s $12.06 million per person or $24.12 million per couple in 2022 but is scheduled to return to 2017 levels soon).2 Savvy Americans are taking advantage of the higher limits to revisit old estate strategies and make gifts before the deadline expires.
Your next step: Do your estate plans take advantage of the temporary (substantially higher) estate tax exemption?
3. LEVERAGE ADVANCED TRUST STRATEGIES
Recent law changes opened the door to advanced trust strategies that could potentially help you immediately cut your income tax bill, protect yourself from lawsuits, and create multi-generational tax shelters while giving you control over your assets now and in the future.3
Your next step: Does a trust make sense for you?
4. REVISIT YOUR POWER OF ATTORNEY
When the estate tax exemption was lower, it made sense to give a trusted agent the power to make financial gifts (to avoid estate tax). Today’s much higher estate tax exemption means you might need to reconsider giving someone else too much control over your money.
Your next step: Does your current Power of Attorney include the ability to make financial gifts?
5. RETHINK YOUR “STRETCH” IRA STRATEGY
If you planned to leave your IRA or 401(k) to children or grandchildren who would “stretch” the distributions across their lifetimes to create a multi-generational legacy, you’ll need to think again. The 2019 SECURE Act killed the stretch IRA by forcing most non-spouse beneficiaries to withdraw (and pay taxes on) the full value of an inherited IRA or 401(k) within 10 years of inheritance.4 If you have one, you MUST take action now to update your strategy.
Your next step: Does your estate plan include a stretch IRA?
6. A TRUST MAY NOT BE THE RIGHT BENEFICIARY OF YOUR IRA
“Pass-through” or “conduit” trusts were common ways to protect assets while allowing heirs the benefits of an inherited IRA. Recent laws removed many benefits to making trusts beneficiaries of IRAs. If you have one, you MUST take action now to update your strategy.
Your next step: Is a trust the beneficiary of your IRA?