High-net-worth clients are urged to act before the estate tax exemption expires in 2025.
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Quick Tax Tip
With Art Werner
CPE Today
A key provision of the Tax Cuts and Jobs Act (TCJA) is approaching its expiration date—and Art Werner, J.D., M.S. Tax, is sounding the alarm for advisors and their wealthy clients.
In the latest episode of the Quick Tax Tip podcast, Werner explains that the temporarily doubled estate and gift tax exemption, enacted under the TCJA, is set to sunset on December 31, 2025. “This creates a lot of uncertainty,” says Werner. “We’re hearing all kinds of things from Congress—maybe an extension, maybe making it permanent, or even letting it die completely. Some are even calling for the estate tax to be repealed. Others want a much higher, even confiscatory, rate.”
With so much political volatility, Werner urges tax professionals to proactively plan for the possibility that the exemption could be drastically reduced—or eliminated altogether.
The TCJA effectively doubled the lifetime estate and gift tax exemption to nearly $13 million per individual (over $25 million for married couples) in 2024. Without Congressional action, this amount could fall by half at the end of 2025.
“For clients with significant wealth, this could be a once-in-a-lifetime opportunity,” Werner warns. “If they’re fortunate enough to be alive, they should consider using that exemption now.”
According to Werner, smart gifting strategies can do more than just beat the clock. They can also optimize tax outcomes for future generations.
“One of the most effective strategies might be to gift assets not just to children, but to grandchildren—or even beyond,” he says. “This ‘grandchild effect’ can help sidestep the additional taxes imposed by generation-skipping transfer (GST) rules, if structured properly.”
By leveraging the full exemption amount while it’s still available, clients can move substantial wealth out of their taxable estate and potentially avoid millions in future estate tax liability.
Although tax professionals have seen last-minute legislative fixes before, Werner cautions against betting on Congress to act in time. “We might lose a significant amount of exemption come January 1, 2026,” he says. “Gifting now, in a way that makes both economic and estate tax sense, could be the smartest move a client makes.”
Werner encourages CPAs and financial advisors to start these conversations with clients now—while there’s still time to evaluate options and execute a well-structured plan.