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  • Monday, 8 July 2024

Act Now: Preparing Ultra-High-Net-Worth Clients for the Estate Tax Exemption Sunset


National Association of Insurance and Financial Advisors (NAIFA) met recently to discuss the latest in trends and changes in the world of insurance. One of those issues tackles the looming change in lifetime exemption. This exemption is an amount that a client may gift during their lifetime or transfer at their passing before the IRS starts to tax the remaining assets. For those clients with high net worth, for example - over $27 million, time may be of the essence due to changes in the Internal Revenue Code.

In 2026, the exemption will be seriously reduced and, if a taxpayer does not use the current exemption prior to that date, then the exemption may be wasted. That is why NAIFA discussed techniques and strategies to prepare financial advisors and their clients to take advantage of opportunities available to the high-net-worth individual.

How do you get started? If you haven’t already, reach out to your financial professional or attorney and ask about the lifetime exemption and how to use it. A seasoned professional, like members of NAIFA, ought to be able to design a tailored roadmap for you to do some planning prior to 2026 and take advantage of planning techniques.

A good example of a tried-and-true technique is the traditional Irrevocable Life Insurance Trust. These trusts can provide liquidity and ease the administration of your estate. They can also remove current life insurance death benefit from your estate if you hold existing policies.

Again, talk to a professional you trust and, if you need a referral, please reach out to Meghan Gray (MGray@1847Financial.com).

One of the most impactful resources available to our financial professionals is the support provided by 1847Financial’s Advanced Sales Team. A special thanks to Amy Bryant, J.D., CLU®: Director, Advanced Sales for providing this comprehensive analysis. She has over 26 years of experience, and specializes in the ultra-high-net-worth market.

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