As someone who has worked hard to build and preserve your wealth, it’s vital to have a thorough understanding of how tax law changes can impact your estate plan. By staying informed and proactive, you can ensure that your assets are protected and distributed according to your wishes. Here are some things to know and do when tax laws change and could potentially impact your estate plan.
Big Tax Law Changes Coming in 2026
Starting in 2026, the current lifetime estate and gift exemption will be cut in half and adjusted for inflation. This means that families with larger estates will pay higher taxes on inheritances than they would if the estate was processed today. As a result, the strategies used to reduce taxes previously and protect generational wealth used today will not be the same ones used in the future.
Update Trusts and Wills
Given the proposed federal tax law changes, you must review and update their trusts and wills. Outdated documents may not align with the new tax laws, potentially causing future complications for your estate and loved ones. By revisiting and revising these legal documents, you can ensure that your assets are distributed according to your wishes and take advantage of any new planning strategies.
Consider Making Gifts
With the looming alterations to the estate and gift tax landscape, making gifts before 2026 may offer significant benefits. Utilizing the current gift tax exemption and potentially taking advantage of lower tax rates can help reduce the size of your taxable estate. Implementing strategic gifting plans can be valuable to your overall tax and estate planning plan.
Meet With an Estate Planner
Given the complexity of estate and gift tax planning, engaging the expertise of an estate planner is paramount. A professional can provide tailored guidance based on the proposed changes and help you navigate the intricacies of the new legislation. By working with an estate planner, you can develop a comprehensive strategy that aligns with your specific financial circumstances and long-term objectives.
Contact a Chicago Estate Planning Attorney Today
When tax law changes occur, it’s a reminder to review and potentially update your estate plan to ensure it reflects your current financial and familial situation. Consulting with a trusted estate planning attorney can help you understand the implications of these changes and work with you to adjust your plan accordingly. Your attorney can offer valuable insight and guidance to help you make informed decisions that align with your long-term goals.
Unless you proactively keep up with changes in estate and tax law, you may not even realize that there have been changes that could impact your estate. Scheduling regular appointments with your estate planning attorney can help you protect your estate and stay informed of any potential changes. Contact James C. Provenza & Associates, P.C. at (847) 729-3939 or fill out our online form to schedule an appointment.