Nov 18, 2024

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There’s More to Estate Planning Than Tax Exemptions

Gene Farrell, the president and CEO of Vanilla, finds that media coverage of estate planning tends to focus almost exclusively on tax-savings strategies that apply to the ultra-wealthy.

This is especially true in the current post-election environment, with many policy experts monitoring what will happen with the many provisions of the 2017 tax overhaul set to expire at the end of 2025 — including the historically high estate tax exemption for individuals and couples.

The consensus is that the Republican Party’s control of Congress and the White House almost assures a long-term extension of the 2017 legislation, with some internal policy fights about the federal budget deficit and the $10,000 cap on state and local tax exemptions possibly complicating the process.

“That means the estate tax exemption is likely here to stay for the long term, and that gives highly wealthy families added flexibility as they engage in legacy planning,” Farrell, who has led the digital estate planning platform since 2021, said in a recent interview with ThinkAdvisor. “But I would actually argue that this focus on the estate tax exemption is not the most important theme for most advisors with respect to estate planning in general.”

As Farrell emphasized, only the very wealthiest families are subject to federal estate taxes in any given year. For the typical mass affluent client family, the estate value isn’t likely to approach the $26 million-plus estate tax exemption level, indexed to inflation.

Estate planning offers significant non-tax benefits for clients at lower wealth levels, including asset protection, small-business continuity planning and consolidated asset management.

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Read more: There’s More to Estate Planning Than Tax Exemptions

[Think Advisor: John Manganaro]