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Estate Tax Exemption Sunset 2026: What Happens When This Bill Expires

Estate tax exemption

Are you aware of the looming changes to estate tax laws? The year 2026 marks a significant milestone as the current estate tax exemption is set to sunset, potentially reshaping the landscape of estate planning. At CQ Consulting Services, we believe it's crucial to understand the implications of this impending change and how it may impact your financial future.

The Current Landscape

Under current legislation, individuals can pass on assets up to a certain threshold without triggering federal estate taxes. This threshold, known as the estate tax exemption, is set at a historically high level. For the year 2022, the exemption was $12.06 million per individual or $24.12 million for married couples filing jointly. This generous exemption has provided significant opportunities for wealth transfer and estate planning strategies.

The Sunset Provision

However, this favorable estate tax landscape is subject to change. The Tax Cuts and Jobs Act (TCJA), enacted in 2017, included a provision that temporarily doubled the estate tax exemption until the end of 2025. Beyond this date, the exemption is scheduled to revert to pre-TCJA levels, adjusted for inflation. Without legislative action to extend or modify the current law, the estate tax exemption will decrease significantly, potentially impacting a broader range of estates.

Implications for Estate Planning

The sunset of the estate tax exemption has profound implications for estate planning strategies. Individuals with estates exceeding the future exemption threshold may face increased tax liabilities, necessitating a reevaluation of their estate plans. It's essential to assess your current estate plan and explore proactive measures to mitigate potential tax consequences.

Strategic Tax Planning Opportunities

Despite the uncertainty surrounding future estate tax laws, there are strategic tax planning opportunities available to individuals and families. From leveraging lifetime gifting strategies to establishing trusts and implementing charitable giving plans, proactive estate planning can help minimize tax exposure and preserve wealth for future generations.

At CQ Consulting Services, our team of experienced estate planning professionals is dedicated to helping you navigate these complex issues and develop tailored strategies to protect your assets and achieve your legacy goals. As the sunset of the estate tax exemption approaches, now is the time to take proactive steps to safeguard your financial future.

Contact us today to schedule a consultation and learn how we can assist you in preparing for the changes ahead. Together, we can navigate the evolving estate tax landscape and ensure that your legacy remains secure for generations to come.

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