The Thompson family had always been mindful of their financial future. John and Sarah Thompson, a successful couple living in Naples, Florida, spent years building their wealth. John worked in real estate, while Sarah managed a chain of boutique stores in the area. Together, they had accumulated assets, including their home, investments, and a family business that they planned to pass down to their children, Ella and Ben. Over the years, John and Sarah had taken proactive steps to plan their estate. They worked with financial advisors and estate planning attorneys to create a will, a trust, and a comprehensive strategy for transferring their wealth to their children and grandchildren. Their goal was simple: to ensure their loved ones would be taken care of and that they could minimize the tax impact on their estate. However, during a recent consultation with their estate planning attorney, they learned some startling news: the federal estate tax exemption, which had allowed individuals to pass a significant amount of wealth without incurring estate taxes, was set to decrease at the end of 2025. This meant that their current estate planning strategies could be affected, and they needed to adjust their plans before the reduction took effect.
The Upcoming Reduction in Gift and Estate Tax Exemptions
John and Sarah learned that the lifetime gift and estate tax exemptions were linked to
the federal estate tax exemption. Currently, individuals can pass up to $12.92 million
during their lifetime or at death without incurring federal estate or gift taxes. This amount
has allowed many individuals to transfer large sums of wealth to their heirs while
avoiding hefty taxes.
However, this generous exemption is set to decrease at the end of 2025. The federal
government has proposed a reduction, potentially lowering the exemption to $5 million,
adjusted for inflation. For John and Sarah, this meant that they could gift and pass on a
smaller amount of wealth without incurring federal gift taxes. With a reduction in the
exemption, they would face an increased tax liability if they didn’t act quickly.
The Thompson Family's Dilemma
As John and Sarah began to grasp the impact of this change, they realized that time was of the essence. The lifetime gift tax exemption would be reduced, meaning that if they didn’t gift a portion of their wealth before the end of 2025, they could face higher estate taxes when passing their assets on to their children. This also meant that their children, Ella and Ben, could inherit less than expected after taxes were applied to the estate. The Thompsons had always hoped to pass their family business, real estate holdings, and investments down to their children. Their desire was to maintain the family legacy, but the looming reduction in the estate tax exemption made this much more complicated. If they didn’t act before the end of 2025, they would miss the opportunity to make larger, tax-free gifts to their children. They turned to their financial advisor, who recommended that they consult with an experienced estate planning attorney to develop a strategy that would allow them to maximize their estate transfer before the exemption decreased. Their advisor explained that this reduction was not just a change in the law but an opportunity to take advantage of the current exemption levels to minimize future tax burdens.
The Solution: Proactive Estate Planning
John and Sarah decided to contact Dellutri Law Group to discuss their options. The firm had an excellent reputation for helping families navigate complex estate planning issues, with over 1,200 five-star reviews from satisfied clients. They called and scheduled a free consultation to review their estate plan. When they met with the attorneys at Dellutri Law Group, they were immediately impressed by the firm’s thorough understanding of Florida estate laws and tax regulations. Their attorney explained the intricacies of the upcoming change in the tax code and offered practical solutions. The Dellutri team worked closely with John and Sarah to help them understand how they could take advantage of the current exemptions before the reduction took effect. Together, they devised a strategy that included gifting some of their wealth to their children and grandchildren over the next few years, before the exemption decreased. By doing so, John and Sarah could reduce the size of their taxable estate while still maintaining control of their assets. They also explored setting up irrevocable trusts, which would allow them to pass assets on to their heirs without triggering estate taxes.
A Path to Protecting Their Legacy
As the Thompsons worked through their new estate plan, they realized the value of taking proactive steps to address the upcoming tax changes. The careful planning and execution of their estate transfer strategy meant that they could still achieve their goals of leaving a meaningful legacy for their children and grandchildren. They felt confident knowing that they had maximized the value of their gifts and reduced the tax burden on their estate. John and Sarah also made sure to review their wills and trust documents to ensure that everything was aligned with their updated plan. They knew that estate planning wasn’t just about minimizing taxes, it was about ensuring that their wealth was distributed according to their wishes and that their family would be taken care of in the years to come.
Don’t Wait: Plan Ahead for the Upcoming Tax Changes
The Thompsons’ experience serves as an important reminder for all individuals who
have accumulated wealth: the upcoming reduction in the gift and estate tax exemptions
could significantly affect your ability to transfer assets tax-efficiently. If you have a
substantial estate, now is the time to act.
Dellutri Law Group can help you navigate these changes and develop a strategy that
minimizes your tax burden while ensuring your wealth is passed on to your loved ones
as you intend. With over 1,200 five-star reviews and years of experience in Florida
estate planning, their team is dedicated to providing personalized legal solutions that
meet your unique needs.
Contact Dellutri Law Group today at 239-939-0900 or visit www.dellutrilawgroup.com
to schedule a free consultation. Take control of your estate planning today before the
new tax laws take effect. Time is running out, and with the right guidance, you can
protect your legacy for future generations.