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If you don’t already have an estate plan in place, you may want to consider putting one together before the end of 2024.
Brian Kuehl, Director of Government and Public Affairs with the ag business advisory company Pinion, says that’s because of a tax law that will be phased out next year.
“In 2017, Congress doubled the exemptions that can be claimed for estates. So right now, you can protect a lot of your wealth from inheritance taxes,” he said. “If those provisions expire a year from now, your ability to protect that wealth goes down dramatically.
The provisions are set to expire next year unless Congress extends them.
“We’re looking at the ending of the increase in limits for state tax and gift tax, so really important for farmers as they’re thinking about 2024 to be thinking about estate planning and recognizing that right now, we have an amazing situation in terms of our ability to do estate planning,” Kuehl said. “But when those provisions expire, it’s going to get much harder to do estate planning. So, it’s well worth thinking about that today.
Kuehl says estate plans and trusts are governed by the existing law when they’re created, and changes to the law afterward don’t change the plan.
“If you take advantage of doubling of amount that you can gift, if you gifted in 2024, it doesn’t matter if you then pass away in 2025 or 2026 after that provision has changed. You’ve already done the gift,” he said. “So, it’s important to take advantage of these provisions while they exist.”
He said the first step is to talk with your tax professional.