With the Baby Boomers passing on their wealth to the next generation, the most significant transfer of wealth is currently occurring. Although the current federal estate and gift tax exemption offers a generous opportunity to transfer wealth (i.e., currently $11.7 million per individual and $23.4 million per couple), there is no guarantee that this exemption will remain in place in the current political climate. Even if left untouched, the federal lifetime estate and gift tax exemption is scheduled to revert back to approximately $5.5 million per individual on January 1, 2026.
This realization makes estate planning even more important for anyone who wants to pass on generational wealth right now. There are a number of tools and techniques that we use in developing an estate plan that can be effective in minimizing the tax burden associated with these transfers. Which planning tools and techniques you choose to include within your personal estate plan will depend on many factors, one of which is how much control you wish to retain over your wealth when it passes onto your designated heirs.