It’s April and everyone’s thinking about taxes. Let’s talk about a tax that might be changing in the next year: the Federal Gift and Estate Tax!

In 2017, the federal estate and gift tax system was overhauled. Lifetime exemption amounts were significantly expanded, meaning individuals could transfer or gift up to $13.61 million dollars without paying any estate or gift taxes. Previously, exemption levels were closer to $5-7 million dollars. However, on December 31, 2025, unless the exemptions are extended, the estate tax exemptions will expire and revert to pre-2017 levels.

Recently, the debate about extending these tax exemptions has been detailed in the news. However, this change may not impact many folks. Many of us will never have estates worth $5 million dollars or more, and as such, the expansion or curtailment of the tax exemption will have no impact. In other words, your estate remains exempt from estate and gift taxes regardless of what Congress decides. But, if you do have significant assets, it is important to keep this in mind. If your pre-existing estate plan included transfers in excess of the anticipated future cuts, or if you have already “used up” your full exclusion and exemption amounts, the IRS has indicated it will not claw back and tax any of those completed transfers (which could be a meaningful estate planning strategy for some). However, if you don’t yet have a plan, or if your plan anticipates making gifts at levels in excess of the anticipated future exemption levels, you might want to speak to an attorney to review and revise your estate plan.