The Numbers are in!

Every year, the Advanced Markets team eagerly awaits cost-of-living adjustment numbers. Once these numbers are published, our team dusts off spreadsheets and formulas to calculate exemptions for the following year. Calculations are in for 2025! The lifetime estate and gift tax exemption, as well as the generation-skipping transfer tax exemption, should increase to $13,990,000 and the annual gift tax exclusion should increase to $19,000. 

The IRS will officially publish these numbers in the next couple of months. Our current projection for the estate tax exemption after the sunset is $7,200,000 but this calculation is an estimate and will likely fluctuate until this time next year. While some are waiting to see what impact the November election may have on tax rates, the sunset is still the law (and will require Congressional and Presidential support to change) and is fast approaching.

This means that clients who currently have an estate tax liability will likely face a larger one in 2026 while many clients who don’t currently have an estate tax liability may have one after the 2026 sunset. Given the many changes, clients benefit from flexible planning options. Married clients should explore spousal lifetime access trusts (SLATs), which can provide flexibility. By funding a SLAT with lifetime gifts to purchase a life insurance policy, clients can help effectively protect their legacy, ensure liquidity and achieve estate equalization — while also providing the beneficiary spouse with lifetime access to trust assets. If you’re still on the fence about SLATs, we have resources that may help:

• Client Guide: SLATs
• BYA: The reciprocal trust doctrine
• JH Solutions^®: Spousal Lifetime Access Trust

John Hancock has timely resources to support you and your clients. Check out our
6 before ’26 blog where we examine six ways John Hancock can help with your estate planning needs before the sunset occurs in 2026.

The business planning landscape is also evolving as seen in the Supreme Court’s recent decision in the Connelly case. Our recent podcast (linked below) reviews the specifics of the case and some of the challenges and opportunities that stem from it. For those with existing buy-sell agreements, check out our new Connelly road map for tailored guidance on next steps.