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Month: January 2025

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Estate Planning

Utilizing Estate Planning For FAFSA Eligibility

Understanding how financial aid and estate planning intersect can make a significant difference when preparing for college expenses. This article will explain how asset ownership influences aid eligibility, offer actionable strategies to increase the chances of receiving aid and highlight estate planning tools that can protect your wealth while optimizing support for your child’s education.

FAFSA and Asset Ownership: The Basics

The FAFSA, or Free Application for Federal Student Aid, evaluates a student’s financial need based on several factors, including family income and assets. However, not all assets are created equal in the eyes of FAFSA. How those assets are owned—by the parent, the student, or even a third party—can significantly impact financial aid eligibility.

Here’s the key: FAFSA assesses up to 5.64% of parent-owned assets when calculating the Expected Family Contribution (EFC). For student-owned assets, though, that number jumps to a whopping 20%. So, keeping assets out of your student’s name increases their chances of receiving financial aid. 

In other words, parent-owned assets are less punitive than student-owned ones. Consider assets like your savings account, investments, or a 529 college savings plan. If you, the parent, own the asset, only 5.64% of its value is considered in the EFC calculation. 

But if your child owns assets outright—like in a UGMA or UTMA custodial account— those accounts will be subject to a 20% assessment. For example, if your child has $10,000 in one of these accounts, FAFSA will expect $2,000 to go toward college costs. Ouch.

What can you do? You can’t legally change UGMA/UTMA account ownership because they belong to the child. However, consider using a 529 plan or a parent’s investment account instead for future savings. 

Estate Planning Meets FAFSA

Here’s where estate planning comes into play. By structuring your assets wisely, you can minimize their impact on financial aid. Let’s explore a few strategies:

1. Irrevocable Trusts

An irrevocable trust can be a powerful tool in estate planning and remove assets from a person’s estate for tax purposes. However, irrevocable trusts are counted for FAFSA purposes if the student or parent is a beneficiary of an irrevocable trust. Note that the entire value of the trust should not be reported, but the beneficiary’s proportional share must be reported. In addition,  if the trust distributes income to the student, that income will be assessed at up to 50%. So, use irrevocable trusts with caution.

2. Retirement Accounts: Hidden Gems

Good news: FAFSA does not count assets in qualified retirement accounts like 401(k)s, IRAs, and Roth IRAs. This makes retirement savings a double win—you’re preparing for your future in a tax-advantaged manner and protecting your child’s financial aid eligibility.

Pro tip: If you have extra savings that would otherwise count on FAFSA, consider contributing to your retirement account. It’s a FAFSA-friendly way to reduce your countable assets.

3. Pay Down Debt

Another savvy move is using liquid assets to pay down debt, such as mortgages or student loans. Since FAFSA doesn’t count your home’s equity or the balance of your debts, this strategy can reduce your reportable assets without hurting your financial position.

4. Timing Is Everything

FAFSA looks at your financial situation as of the day you file the form. That means you can time certain financial moves to optimize your aid eligibility. For instance, if you plan to sell an investment or receive a large bonus, try to do so after filing FAFSA to avoid inflating your assets or income for that year.

Practical Steps to Take Now

So, what can you do right now to prepare? Here are some actionable steps:

Review Your Assets: List all your family’s assets, including who owns them. Pay special attention to student-owned accounts and assets held in trusts.

Shift Savings to FAFSA-Friendly Accounts: If you’re saving for college, prioritize 529 plans owned by you, the parent. Avoid putting large sums into custodial accounts.

Create a Life & Legacy Plan: Work with me to create a comprehensive Life & Legacy Plan that may include irrevocable trusts or other strategies to protect your assets and your financial aid eligibility.

Max Out Retirement Contributions: If possible, contribute to your 401(k) or IRA to reduce your countable assets while securing your financial future.

Plan Ahead for Income Events: Be mindful of how bonuses, stock sales, or other income events could affect your FAFSA profile. If possible, defer these until after filing.

The Big Picture

Balancing estate planning and FAFSA eligibility can feel like walking a tightrope. On one hand, you want to preserve your family’s wealth and secure your child’s future. Conversely, you don’t want to leave money on the table regarding financial aid.

Understanding how asset ownership works and taking strategic steps can position your family for success. Whether it’s shifting assets, leveraging trusts, or timing your financial moves, a little planning can go a long way. And when that acceptance letter arrives—along with a generous financial aid package—you’ll be glad you took the time to get it right.

How We Help

We can help you create a comprehensive strategy that optimizes education funding and wealth preservation goals. We’ll work with you to structure your assets effectively and ensure your plan adapts as the law, your assets, or your family dynamics change. Our approach focuses on creating clarity and consistency across all aspects of your financial planning, from education funding to legacy preservation.

Book a call to learn how we can help you create the right plan for your family. Contact us today to get started.

This article is a service of August Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. 

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Categories
Estate Planning

Our Top 10 Most Common Estate Planning Questions: Part 2

When planning for your family’s future, the options can feel overwhelming. Should you get a will? Create a trust? And what happens if you do nothing at all? These aren’t just academic questions – your choices today will impact your loved ones tomorrow. In this second installment of a two-part Q & A series, I’ll break down the key differences between your primary estate planning options and explore practical ways to ensure your family is protected, no matter what the future holds. So, let’s dive in, beginning with a question about the basic estate planning documents.

Q: What is the difference between a will, living trust, and dying intestate? And what does that mean, practically speaking?

A: If you die without an estate plan, you do have a plan – it’s just the plan chosen for you by the state, and you may not like it. Your loved ones probably won’t like it because it means they’ll likely need to deal with a court process called “probate.” When you die without a will, it’s called dying “ intestate,” and it means that your assets are distributed according to state law after a process in which a judge decides who gets what. This could mean your assets would not go to the people you choose in the way you choose, and your family could face a lengthy, expensive, and public court process during an already difficult time.

A will is your basic instruction manual for what happens to your assets after you die, but it still requires your family to go through the probate process. While a will allows you to name guardians for your minor children and specify who gets what, your “executor” or “personal representative” must file the will with the court and potentially wait months or even years before receiving your assets. Plus, everything becomes public record – so anyone can look up what you owned and who got what, leaving the inheritors open to predators. 

If you create a trust, your assets can be passed to the people you choose without a court process and completely privately. Think of a trust as a container that holds your assets during your lifetime. Then, upon your incapacity or death, a successor trustee you’ve named can step in to handle your assets, manage your affairs, and pass your assets to your chosen beneficiaries. With a properly funded trust, your beneficiaries could receive their inheritance within weeks or months instead of months or years. 

Q: Is probate always required when someone dies?

A: The necessity of probate depends largely on how your assets are titled when you die and the total value of assets in your personal name at the time of your death. Assets solely in your name with no beneficiary designation must go through probate, and a Judge must order the distribution. Some exceptions: jointly owned property automatically passes to the surviving owner, assets with named beneficiaries (like life insurance policies and retirement accounts) go directly to those beneficiaries, and assets held in a properly funded living trust transfer according to the trust’s instructions, without court involvement. 

These issues can be complicated and have a huge impact on your loved ones, so it’s important to work with a trusted advisor who can help you understand your goals, and then properly structure your assets to accomplish your goals, especially if you want to keep your family out of court and out of conflict. Keep reading to find out how I can help.

Q: What if I’m uncomfortable talking about death and money?

A: While it’s completely natural to want to avoid thinking about death and avoid talking about money, not planning for the reality of death or a possible incapacity before death can leave your loved ones with an expensive, time-consuming mess to clean up during what will already be an emotionally difficult time. Here’s what you absolutely must know: First, if you become incapacitated or die without a plan, the court will make all the decisions about your care and your assets according to state law, not according to what you would have chosen. 

Second, if you have minor children and no estate plan, the court will decide who raises your children and who takes care of the assets you leave behind without your input. Think about that for a moment. A judge is a stranger to you and your kids, yet that’s who will decide your children’s future – who makes decisions about their education, health matters, and financial affairs. And, then, whatever you leave behind and whatever is left after the court process goes to your children when they turn 18 without protection (i.e., they’ll be free to spend it all as quickly as they want). If that concerns you, you need a plan of your own.

Third, your family will likely have to spend significantly more time and money dealing with your affairs if you don’t have a plan than if you had taken the time to create one. The good news is that making a plan doesn’t have to be overwhelming or uncomfortable—working with a trusted advisor who can guide you through the process step by step can bring you peace of mind, knowing you’ve taken care of the people you love. 

Q: How can you minimize your family’s stress by handling these matters the simplest way possible?

A: The best way to minimize stress for your family is to create a clear, comprehensive Life & Legacy Plan before anything happens to you. Many people think creating an estate plan will be stressful, but lack of planning causes the most stress for families. 

I make the process simple:

First, I help you understand what you own and what would happen to everything you own and everyone you love (including yourself) when something happens to you. Then, I support you to make informed, empowered choices about who should receive your assets, who should carry out your wishes, and how you want it all handled. Finally, I help ensure your plan will work when your family needs it by supporting you to review your plan regularly as your life changes and ensuring we maintain an updated inventory of your assets to ensure none of your assets are lost to the state due to oversight after your death.

Beyond creating the right legal documents, I’ll support you in other ways to make things easier for your loved ones. I’ll help you document specific wishes for personal items with sentimental value and have conversations with your loved ones about your choices so there are no surprises later. We’ll conduct a Life & Legacy Interview so you can pass on your values, insights, and stories – the intangible (and most important) assets that are often lost when someone dies. Most importantly, I will be there for your family when you can’t be there, to guide them through the process and ensure your wishes are carried out properly. This is the power of our Life & Legacy Planning® process.

How We Help You Create Peace of Mind

We understand that thinking about death and money can feel overwhelming. We’ve created a simple, step-by-step process to help you get your affairs in order and protect your family. Our Life & Legacy Planning process goes beyond just creating legal documents – we help you make informed decisions about your family’s future, keep your plan updated as your life changes, and ensure your wishes will be carried out properly when the time comes. Most importantly, we’ll be there for your family when you can’t be, providing the guidance and support they’ll need during a difficult time. You’ll gain peace of mind knowing you’ve done everything possible to make things easier for the people you love.

Contact us today to get started.

This article is a service of August Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. 

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Categories
Estate Planning

Our Top 10 Most Common Estate Planning Questions: Part 1

Regarding estate planning, I get many questions about many topics. One of the most common questions I hear concerns account ownership and asset management. Understanding how accounts are titled and who has access to them isn’t just about convenience—it’s about ensuring your assets transfer smoothly to your loved ones while protecting them from potential risks. 

In this first installment of a two-part series, I’ll answer the most common questions about asset ownership and management. I’ll also outline ways in which you can make things as easy for your family after your death. So, let’s dive in, beginning with a question about joint assets.

Q: What’s the difference between joint ownership and transfer-on-death designation?

A: Joint ownership means both parties have full access to and ownership of a specific account or piece of real estate while they are alive. When one owner dies, the surviving owner automatically receives full ownership. This can be convenient but comes with risks—a joint owner can withdraw all the money at any time, and the account could be vulnerable to either the joint owner’s creditors or legal judgments.

On the other hand, transfer-on-death (TOD) or payable-on-death (POD) beneficiary designations give you sole control during your lifetime. Your designated beneficiary has no access or rights to the account while you’re alive but receives the assets automatically upon death. This arrangement prevents another person from accessing your assets while you’re alive and avoids the court process (called probate) after you die. 

One important note: When you have a joint owner on your account or a designated beneficiary, that person will receive all the funds after you die, no matter how old they are or what your family dynamics are. This can create conflict in your family or cause someone fiscally irresponsible to inherit a windfall with no safeguards potentially. Lawsuits are filed all the time by disgruntled siblings who find out that the caretaker sibling receives all the money in a parent’s account (or sole title to real estate) rather than being distributed equally among all siblings. If this concerns you, read on to find out how you can book a call with me to learn about your options. 

Q: If I hold my property jointly or use a TOD or POD, do I need to have a Trust?

If you use joint ownership or TOD/POD instead of a Trust, you need to consider some traps for the unwary. First, as indicated above, jointly owned property could be at risk from creditors of either party. I think of my client, the granddaughter, who was titled on grandma’s bank account. When the granddaughter’s husband didn’t pay the bill on the copier contract for his business, the copier company sued and got a judgment against him. Next thing you know, grandma’s account gets garnished because it was held jointly with the granddaughter, and so the granddaughter was liable on the copier judgment.

Suppose you use a TOD or POD to avoid a scenario like that. In that case, the problem is that the TOD/POD only operates in the event of death, not incapacity, and TOD/POD could result in the wrong person ending up getting the assets or the assets ending up in probate if there is an unexpected “order of death” issue. Imagine grandma leaving the house to grandson using TOD, but grandma and grandson are in the car together when there’s an accident, and grandson dies first, with grandma dying shortly thereafter, and before she could change the TOD/POD. Who gets the property, and how? In this case, the property would have to go through probate and pass to grandma’s “next of kin” according to the state intestacy statutes. Given that grandma was leaving her property to her grandson, she likely didn’t want the “state’s plan” for her assets. But that’s what she’ll end up with.

The solution is not to use joint ownership or a TOD/POD to pass title to assets at your death. Instead, set up a trust and retitle the property. Then, everything can be handled easily, privately, and in our office for the people you love.

Q: What happens to retirement accounts and life insurance policies after death?

A: These accounts pass directly to your named beneficiaries, bypassing probate and any instructions in your will, as long as you have named beneficiaries and if you haven’t named a minor as a beneficiary. This is why keeping your beneficiary designations up to date is crucial. If your beneficiary designations are outdated – listing an ex-spouse or deceased person, for example – your assets might not go where you want them to. Even worse, if no beneficiary is listed, these accounts would go through probate, costing your loved ones unnecessary time and money. Suppose you’ve named a minor as a beneficiary. In that case, assets will be subject to a court process to hold the assets under court order until your minor beneficiary is “of age” – usually 18 or 21, depending on state law.

Q: Do I need an inventory of my assets?

A: Yes, and it’s critically important that you create an inventory and keep it current. We include this in all of our planning options because it’s one of the most critical parts of the planning process, even though, surprisingly, it’s not part of most estate planning with traditional lawyers or legal insurance plans. Our unique Life & Legacy PlanningⓇ process includes an asset inventory because if you don’t inventory your assets, your family will not know what you have, how to find it, and how to access it as easily and affordably as possible.  Lost assets end up in your state’s treasury as unclaimed property. According to the National Association of Unclaimed Property Administrators, approximately 1 in 7 people in the U.S. – or about 33 million people – have unclaimed property, totaling roughly 77 billion dollars. You need an asset inventory if you want to ensure that your assets go to the people or charities you want rather than to your state government’s unclaimed property fund. And it must stay up to date.

Q: How often should I review my asset inventory and account designations?

A: Your inventory and beneficiary designations need to be kept updated over time to reflect your current circumstances when you die. Your Life & Legacy Plan includes regular, ongoing reviews of your asset inventory so no asset gets lost. 

It’s also important to update your asset inventory and account designations whenever you experience a significant life event such as:

  • Marriage or divorce
  • Birth or adoption of a child
  • Death of a beneficiary
  • Purchase or sale of significant assets
  • Moving to a new state
  • Starting a business
  • Retirement

When you work with me, you won’t have to remember this alone. I’ll proactively remind you to update your inventory and beneficiary designations and help make it as easy as possible for you to take action. 

Q: What’s the best way to organize and store my asset information?

A: Create a clear, organized system that your loved ones can easily access if something happens to you. However, be careful about including sensitive information like passwords in your will, as it becomes public record after death. Instead, consider keeping this information in a secure location and telling your trusted family members, executor, or trust administrator how to access it. I will help you explore the best way to do this when we work together.

How We Help You Get Organized and Protected

We help you create a comprehensive Life & Legacy Plan that includes a complete asset inventory, proper account titling, and coordinated beneficiary designations. We’ll help you understand the implications of different ownership structures and guide you in making the best choices for your family’s unique situation. Plus, we’ll help you keep everything updated through regular reviews, ensuring your plan continues to work as intended. You’ll gain peace of mind knowing that your assets will go to the people you want in the way you want.

Contact us today to get started.

This article is a service of August Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. 

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Categories
Estate Planning

Estate Planning in Times of Change: Part 2

In Part 1 of this series, we explored general estate planning considerations in today’s changing landscape, especially those related to taxes, interest rates, and asset protection. Now, let’s focus on protecting families with unique planning needs, including LGBTQIA+ families and those with special-needs children. 

In this political transition, comprehensive estate planning becomes crucial for these families, who may face legal rights and protection changes. Recent political developments have heightened concerns about potential changes to LGBTQIA+ rights, healthcare access, and educational protections. While we can’t predict future legal changes, we can create strong safeguards through careful planning—just in case. Let’s dive in to find out how.

Understanding the Stakes for LGBTQ+ Families

Recent political shifts have shown how quickly federal protections can change. The incoming administration has indicated plans to roll back various LGBTQIA+ protections (see here and here), including changes to Title IX interpretations and healthcare access. While marriage equality currently remains protected by federal law, LGBTQIA+ families may want to consider creating multiple layers of legal protection independent of federal policy.

Healthcare decision-making rights are also a concern, and current legal protections are not guaranteed. If there’s a significant shift in law and policy, some healthcare providers may challenge a spouse’s right to make medical decisions. However, creating comprehensive healthcare directives ensures your wishes are honored and your loved ones can advocate for you in critical moments.

Documenting and protecting parental rights becomes especially important for LGBTQIA+ couples with children. Given potential changes to federal education policies and Title IX interpretations, clear legal documentation of parental rights and educational decision-making authority becomes crucial. This includes creating legal frameworks that remain valid even when traveling between states with differing levels of LGBTQIA+ protection.

If you’re concerned about any of these potential changes, I can help. Read on to learn how to schedule a complimentary consultation call with me.

Protecting Healthcare Access and Rights

In addition to concerns about a change in federal policy, recent state-level restrictions on healthcare access highlight the importance of comprehensive planning for medical decisions. It’s time to create a comprehensive Life & Legacy Plan with detailed provisions for healthcare choices and medical advocacy. For families with transgender members, especially, consider documenting current medical providers and creating contingency plans for accessing care if federal or state policies change. 

With my Life & Legacy PlanningⓇ process, I’ll help you establish comprehensive medical powers of attorney and healthcare directives that clearly state your wishes and designate trusted advocates. These documents become especially important when traveling between states or if federal protections shift. We can also include specific language about gender-affirming care and other medical preferences to ensure your healthcare choices are respected.

Safeguarding Educational Rights and Family Recognition

With potential changes to educational policies and funding, families should consider additional protections for their children’s educational rights. This includes clear documentation of parental authority and educational decision-making powers. Consider creating additional legal frameworks to protect your children’s rights to use their correct names and gender markers in school settings.

If the Department of Education makes significant changes, comprehensive educational planning becomes even more crucial for families with children with special needs. The Department of Education, through the Office of Special Education Programs, provides resources to support students with disabilities through age 21. I can help you find support to document current educational supports and create contingency plans for maintaining services if new federal education policies or funding changes affect special education programs. 

Building Comprehensive Legal Protection

Traditional estate planning often falls short of protecting vulnerable families during political change. Your plan should include multiple layers of protection that work together to secure your family’s future regardless of policy shifts, and this simply doesn’t happen when you think about estate planning as a set of documents, which is the traditional model. Instead, you need a comprehensive Life & Legacy Plan to protect your family entirely. When you work with me, your Life & Legacy Plan, customized for your unique family dynamics, might include:

  • Trust structures that provide clear documentation of your intentions and protect your family’s financial security independent of federal recognition of relationships.
  • Backup plans for accessing essential services and support if federal or state policies change.
  • Documenting your current rights and protections while they remain in place creates evidence of your family relationships and intentions that can support future legal claims.

We support you in creating your comprehensive Life & Legacy Plan that works for you and your family when needed. 

The Importance of Regular Reviews and Updates

Regularly reviewing your estate plan becomes essential as political and legal landscapes shift. What works today might need adjustment as circumstances change. My Life & Legacy Planning process includes regular reviews and updates, so your plan stays current with legal developments. This ensures your plan works when needed, rather than sitting on a shelf collecting dust. 

Since I know you’re busy, you never have to think about reviewing your plan. We will contact you proactively and regularly to update your plan as laws and policies change.

How We Help You Protect Your Family

The time to act is now. Don’t leave your family’s security to chance. I help you create a comprehensive Life & Legacy Plan that accounts for your unique circumstances and ensures your family stays protected regardless of legal or policy changes. We’ll help you understand your options and create a plan that truly suits your family’s needs.

Contact us today to get started.

This article is a service of August Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. 

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Categories
Estate Planning

Estate Planning in Times of Change: Part 1

With a new presidential administration onboarding, the estate planning landscape is shifting beneath our feet. If you’ve been waiting for the “right time” to create or update your estate plan, there’s no time like the present, which presents opportunities and urgencies that demand attention. With anticipated changes on the horizon and favorable conditions that won’t last forever, understanding your options has never been more critical. 

In this two-part series, we’ll explore what we know for certain, what remains unclear, and most importantly – what you can do about it. Next week, we’ll look at strategies for protecting loved ones who may be especially vulnerable in the coming years. But this week, we focus on taxes, interest rates, and asset protection. Let’s dive in.

What We Know About Taxes and Interest Rates

Here’s what we know: The current estate planning environment offers some significant advantages that won’t last forever. The estate tax exemption for 2024 sits at $13.61 million per person ($27.22 million for married couples) – the highest it’s ever been. That number increases in 2025 to $13.99 million per person (or $27.98 million for married couples). You can transfer substantial wealth to your loved ones without triggering federal estate taxes. This creates a once-in-a-lifetime opportunity for many families to secure their legacy and protect their assets from future estate tax exposure.

However, we also know that this generous exemption is scheduled to sunset on December 31, 2025. Without new legislation, the exemption amount will drop significantly – to approximately $7 million – on January 1, 2026. This means that gifting assets out of your estate in 2025 could give you a $7 million opportunity to move assets that otherwise could be subject to estate tax rates that have been as high as in the past. When you are considering whether to gift assets out of your estate in 2025, remember to consider:

1. Not just the current value of your assets, but what they will grow to over your lifetime;

2. You can gift assets in ways that allow you to maintain aspects of control and even use. Call me and let’s discuss it.

3. The earlier in the year you get started on your considerations, the less expensive your planning will be, and the more likely we can get it done in time, so if you are likely to have an estate over $7 million in value at the time of your death, call me immediately to schedule. 

Pausing here momentarily, I want to point out something important: Your estate may be larger than you think. For tax purposes, your estate includes your home’s fair market value (minus the mortgage) and any other real estate you own, life insurance policies, retirement accounts, investment accounts, and other assets. So, while you may have assets that total less than the $13.99 million exemption in 2025, you very well could be affected by the 2026 exemption. If you want to know for sure, I can help. Read on to find out how to book a call with me.

Additionally, 2024 gift tax laws allow you to give up to $17,000 per person annually without triggering any tax consequences. For married couples, you could give up to $34,000 to each child, grandchild, or anyone else to protect assets and pass them to your loved ones without tax liability. This is separate from the lifetime estate tax exemption and represents an additional tool for reducing your taxable estate. In 2025, the gift tax exclusion will increase to $19,000 per person.

Interest rates are another crucial factor. After a period of historic high interest rates intended to curb inflation, rates have finally begun to decline (though at the time of publishing, rates are fluctuating). Lower interest rates could make specific estate planning strategies particularly effective, especially if you want to transfer wealth to future generations. To learn more, book a call with me below.

Now that you’re clear on the current state of taxes, interest rates, and asset protection, let’s shift gears and discuss what’s uncertain. 

What Remains Uncertain

We can anticipate changes with the new presidential administration and legislative session, but what those changes are is unclear. Different administrations often have vastly different approaches to tax policy, which can significantly impact estate planning strategies.

Here’s what we don’t know:

  • Whether new legislation will freeze the current exemption and stop the estate tax exemption from dropping in 2026 
  • How long interest rates will continue to decline
  • What changes might come to the gift tax exclusion and other wealth transfer tools
  • Whether state-level estate taxes might change in response to federal shifts
  • How treatment of retirement accounts and inherited IRAs might evolve
  • Whether new restrictions might be placed on currently available planning strategies

With all this uncertainty, you may feel tempted to sit back and see what happens. However, waiting could mean missing valuable opportunities to protect your family’s financial future. History shows us that when tax laws change, they often do so quickly and with limited opportunities to act before new rules take effect. So, the time to at least have a conversation and start the discussion is now.

Why You Need to Take Action Immediately

Combining what we know and what remains uncertain creates a clear imperative: you should take immediate action. Here’s why:

Current Benefits: Today’s high exemption amounts and declining interest rates create optimal conditions for transferring wealth. By acting now, you can lock in these advantages before they potentially disappear. Many of the strategies available today might be limited or eliminated in the future.

Future Protection: I help you create a properly structured Life & Legacy Plan that can help shield your assets from future tax changes. While we can’t predict what changes will come, we can build flexibility into your Life & Legacy Plan to adapt to various scenarios. This might include using specialized trusts, family-limited partnerships, or other advanced planning tools that can provide long-term benefits regardless of how tax laws change.

Peace of Mind: Beyond tax considerations, creating a Life & Legacy Plan ensures your wishes will be honored and your loved ones protected, regardless of what changes come at the federal or state level. This includes ensuring your healthcare directives are current, your power of attorney designations are appropriate, and your asset protection strategies are robust. I also help you keep your plan updated over time so your plan always works – no matter who’s in office.

Family Security: The actual value of estate planning goes far beyond tax savings. It’s about ensuring your family has the resources and guidance they need when you can no longer provide them. This includes protecting your children’s inheritance, providing for family members with special needs, and ensuring your charitable goals are met.

Speaking of family members with special needs, check back next week. In Part 2 of this series, we’ll explore specific strategies for protecting vulnerable family members and preserving family harmony through times of change. We’ll also discuss planning considerations for LGBTQ+ families, families with children who have special needs, and other situations requiring special attention in today’s environment. 

Your Next Steps

I understand that these changes and uncertainties can feel overwhelming. That’s why I offer a Life & Legacy Planning® Session designed to help you understand exactly how these current conditions and upcoming changes might affect your family.

Don’t wait until the last minute to act. While tax considerations are important, the real value of estate planning lies in protecting your family and preserving your legacy.

Take the first step toward securing your family’s future by booking a Life & Legacy Planning Session. Contact us today to get started.

This article is a service of August Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. 

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

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The August Law PLLC team will work hard to deliver good quality information upon subscription. However, if you decide that you no longer want to receive emails from us, feel free to click the "unsubscribe" button at the bottom of the email received.

The August Law PLLC team will work hard to deliver good quality information upon subscription. However, if you decide that you no longer want to receive emails from us, feel free to click the "unsubscribe" button at the bottom of the email received.