Estate Tax Uncertainty – Will We or Won’t We? A Potential Solution for Married Couples

For almost a decade, the wealthy have had less to worry about when it came to potential federal estate and gift taxes, thanks to the Tax Cuts and Jobs Act of 2017 (“TCJA”). The TCJA doubled the estate and gift tax exemption amount from $5 million to $10 million, adjusted annually for inflation, per person.

In 2024, the exemption amount is $13.61 million. In 2025, it will be around $14 million, after inflation adjustments. That means that a married couple can pass on over $27 million today through lifetime gifts or at death.  However, the TCJA also includes a provision that this doubling will expire at the end of 2025, causing the exemption amount to revert back to somewhere around $7 million on January 1, 2026.

That’s still about $14 million for a married couple. While still a lot of money, that will expose many more wealthy couples to estate taxes. In addition, for practically all married couples, estate tax planning assumes that any estate tax liability will be paid on the death of the last surviving spouse.

 As we get closer and closer to the sunset of the estate tax provisions in the Tax Cuts and Jobs Act of 2017, wealthy married couples have options to remain flexible with their planning using survivorship life insurance from Security Mutual Life Insurance Company of New York.