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Navigating Tax Changes

The estate exemption will be going back to previous levels.

As we approach the end of the year, it is important to understand the significance of estate planning, especially considering the upcoming tax changes scheduled for 2025. Estate planning is a crucial aspect of financial management that involves preparing for the distribution of assets in the event of death or incapacitation. With tax laws constantly evolving, staying informed and adapting your estate planning strategies are essential for preserving and transferring wealth to future generations.

The Tax Cuts and Jobs Act of 2017 brought significant changes to the federal estate tax laws, doubling the estate tax exemption to $11.18 million per individual in 2018. This exemption is adjusted annually for inflation (the 2024 exemption is $13.61 million), presenting a significant opportunity for high-net-worth individuals to transfer assets without incurring estate taxes. However, these changes are temporary and set to expire at the end of 2025, reverting the exemption back to pre-2018 levels, which were significantly lower.

As we approach 2025, individuals and families with substantial assets must proactively review their estate plans and consider the potential impact of the scheduled tax changes. Here are some key strategies to navigate the 2025 tax changes and optimize your estate planning:

1. Review and Update Your Estate Plan: Take this opportunity to review your existing estate plan and ensure it aligns with your current financial situation and goals. Consider consulting with your CPA, an estate planning attorney or financial advisor to make any necessary updates or adjustments.

2. Utilize Gifting Strategies: With the current high estate tax exemption, gifting assets during your lifetime can effectively reduce the size of your taxable estate. Leveraging annual gift tax exclusions and lifetime gift tax exemptions can help transfer wealth tax-efficiently to your heirs.

3. Consider Trusts: Trusts can be powerful tools for estate planning, controlling asset distribution, and potentially reducing estate taxes. Explore options such as revocable trusts, irrevocable trusts, and charitable trusts to achieve your estate planning objectives.

4. Evaluate Life Insurance: Life insurance can be critical in estate planning, providing liquidity to cover estate taxes and other expenses. Review your life insurance policies to ensure they align with your estate planning goals and consider leveraging life insurance trusts for added benefits.

5. Stay Informed: Stay abreast of legislative developments and tax law changes that may impact your estate planning strategies. Working with knowledgeable professionals can help you navigate complex tax laws and make informed decisions.

Clifford S. Gelber, CPA, is a partner in the Boca Raton and Wynwood offices of Gerson Preston Klein Lips Eisenberg Gelber. Contact him at csg@gpkleg.com

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Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.