Are you ready?
No, not for what will surely prove to be one of the most
interesting presidential election years in our nation’s story but
rather I am talking about the greatest period of wealth transfer
in our nation’s history.
Modest suggestions are that Americans will transfer 1.6 trillion
dollars over the next two decades. Baby Boomers have always
made their presence felt from their arrival beginning in ’46,
through ’64. In fact, Those Americans born in 1955 have the
fine distinction of being the largest birth rate year in our
nation’s history.
The Boomer Advantage
Wealth transfer is happening and will continue to happen at an even faster rate. It’s no wonder, really. The Baby Boomers
were afforded the luxury of being born at a time when the United States first became a superpower, buying lower cost homes
and watching their homes value triple and beyond the growth any generation had seen before. Further, the stock market has
recorded record profits during their lifetimes with no equal in our nation’s history.
Tax Planning in 2024
So, what to do, well near term 2024 will bring new exemption and exclusion amounts that are record-setting highs, providing,
the most favorable tax environment to date for tax planning. Many planners will feel it is important to utilize the lifetime
unified estate and gift tax exemption during the election year before changes are set into motion.
The lifetime unified estate and gift tax exemption amount will increase by $690,000 from $12,920,000 to $13,610,000 which
will certainly pique a lot of interest. The annual gift tax exclusion amount will increase by $1,000 to $18,000. Another big issue
will be the Trump Tax Act provisions sunsetting at the end of 2025; unless a legislative change is enacted. Most notably, the
above referenced lifetime unified estate and gift tax exemption amount of $13,610,000 will be reduced to pre-Trump Tax Act
levels, estimated to be about $7 million.
Time is of the Essence
For estate planners with clients whose estates could exceed that amount, time is ticking in a “use it or lose it” situation with
the risk of clients paying up to 40 cents on every dollar over the exemption amount to the government instead of their family
or chosen beneficiaries. Careful tax planning and leveraging expert counsel will be of the utmost priority.
Rich is a Managing Director at Empire Valuation Consultants. He has close to 40 years of experience in the estate and trust industry and is responsible for furthering the development of Empire’s valuation services in this area.
Our estate and gift tax clients extend from small partnerships, to mid-sized corporations, to multi-billion dollar estates, to some of the largest private companies in the country. In addition, we have extensive experience with large estate tax engagements involving multiple entities and complex tiered structures, with situations in which the estate has included interests in over 100 entities.
Rich’s experience includes the administration of complex closely held assets and the implementation of sophisticated planning structures for many clients spanning industries such as, manufacturing and distribution, publishing, construction, transportation and retail chains, to name a few.