Estate Planning in 2025: Key Changes You Need to Know Before the New Year
As we prepare to say goodbye to 2024, it’s time to think about your legacy. Estate planning is more than numbers and documents—it’s about protecting your family and ensuring your values live on. The laws surrounding estate planning evolve, and 2025 brings potential changes that could affect your financial future. Now is the time to take charge, review your plan, and make sure your wishes are honored.
Whether you’ve already created an estate plan or are just starting, this year-end is your chance to ensure it aligns with the latest rules and your life’s changes.
Year End Strategies to Maximize Your Estate Plan
The rules are changing, and they’ll shape how you pass on your legacy. The Tax Cuts and Jobs Act (TCJA) of 2017 gave us historically high federal estate and gift tax exemptions—$13.6 million per individual in 2024.
But this generous threshold won’t last forever. At the end of 2025, those exemptions will be cut to about $5 million unless Congress acts. If your estate has grown over the years, you could face unexpected taxes that might reduce what you leave behind.
The end of the year is a perfect time to make smart financial moves. Start with the gift tax exemption. You can gift up to $18,000 per individual in 2024 without triggering taxes. Have grandchildren? Nieces or nephews? This is a simple way to reduce the size of your taxable estate while helping loved ones now.
Charitable giving also deserves a spotlight. Donating appreciated securities allows you to support the causes you care about while avoiding capital gains taxes. It’s a win for you and a win for the organizations that matter most to you.
Tax-loss harvesting is another powerful tool. If your portfolio has taken hits this year, you can sell off losses to offset gains, reducing your tax liability. This strategy doesn’t just benefit your annual taxes—it strengthens your estate by protecting more of your wealth.
Steps to Take Before the Year Ends
The end of the year is a critical time to ensure your estate plan works for your future. While big-picture strategies like tax planning and gift exclusions are essential, here are some often-overlooked steps you should prioritize:
1. Organize Your Financial Records
Create a detailed inventory of your assets, including bank accounts, investments, property, and digital accounts. This list simplifies estate administration and ensures nothing is missed when the time comes.
2. Prepare for Incapacity
Review and update your healthcare proxy and financial power of attorney. These documents ensure someone you trust can make decisions if you’re unable to.
3. Revisit Guardianship Decisions
If you have minor children, confirm that the guardians named in your plan are still the right choice. Situations can change, and it’s essential to reflect those changes in your documents.
4. Audit Your Trusts
If you’ve established any trusts, confirm they’re properly funded. Assets not titled in the trust’s name may still go through probate, defeating the trust’s purpose.
5. Communicate Your Wishes
Open conversations with your family reduce future confusion and potential disputes. Let them know where key documents are stored and your reasoning behind major decisions.
Look Ahead with Confidence
The future isn’t just something that happens to you—it’s something you shape. Estate planning gives you control over what comes next, ensuring that your life’s work supports the people and causes you care about. The new year is an opportunity to start fresh, make adjustments, and solidify your legacy.
At the Center for Estate Planning, a Maddin Hauser practice group, our deep understanding of the law, coupled with our commitment to you, equips us to guide you through this complex landscape. Don’t navigate these waters alone—reach out to us today.