With the election results in, many are wondering how estate planning strategies might change in 2025. The good news? You can move forward with confidence—there are no immediate policy shifts that require a major overhaul. In fact, given unified control of the White House, Senate, and House, we believe it is unlikely that TCJA will sunset at the end of 2025. While we believe this means there is no urgency to make planning decisions this calendar year, we still suggest speaking with your advisor to see what updates may make sense to protect your long-term interests based on your specific goals.
Here is what you need to know:
1. Key Estate Planning Strategies Remain Intact
- Grantor trusts, dynasty trusts, GRATs, and Private Placement Life Insurance (PPLI) remain effective tools. No reason to delay planning.
- The Tax Cuts and Jobs Act (TCJA) is unlikely to sunset. That means estate tax exemptions should remain at current levels.
- If you are wealthy, you do not need to rush to max out your estate tax exemptions—but if it makes sense for your plan, there is no reason to wait.
2. Liquidity Crunch: Plan Ahead to Avoid Fire Sales
- The tight lending market has made it difficult to get liquidity without selling assets—this is especially true in commercial real estate.
- Many commercial lenders have extended timeframes, making it harder to access capital quickly.
- Selling at a discount is often the only option for those needing immediate liquidity.
3. Life Insurance as a Liquidity Solution
- Life insurance can play a crucial role in covering estate taxes without forcing the sale of assets at an inopportune time.
- It gives fiduciaries flexibility to sell when it makes sense, rather than at a steep discount to cover tax obligations.
- If liquidity is a concern, consider reviewing life insurance strategies now to prevent future financial stress on heirs.
Bottom Line: 2025 Is a Year for Strategic, Not Reactionary, Estate Planning
- No need for major changes—most planning tools remain in place.
- Liquidity challenges require proactive planning—do not wait until you are forced to sell.
- Life insurance can be a critical estate planning tool for maintaining flexibility and preserving asset value.
With no dramatic tax law shifts expected, now is the time to fine-tune your estate plan with your trusted advisors and ensure you are positioned for the future—without the pressure of last-minute changes.
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