How looming tax law change could affect ultra-high-net-worth

investmentnews.com:

HNW and UHNW clients are increasingly seeking more estate planning services. However, it’s also an area that’s currently underserved in the market, as Aaron White, chief growth officer and wealth advisor at Adero Partners, an independent RIA in California, attests.

But it’s also one area that’s starting to get a lot of attention because of an upcoming tax law change.

“The 2017 Tax Cuts and Jobs Act sunsets [in 2025] along with the lifetime exemption that gets reduced to 50 percent unless there’s an extension,” he says. “A lot is up in the air this year with the election. The election and the estate planning tax law change is certainly top of mind for a lot of our clients.”

This is why Adero is taking a “wait and see” approach until the end of the year, when the results of the election will be determined. “That may give us a bit more clarity on which way it’s going to go, depending on who’s in office,” White noted.

Although it went relatively unnoticed at the time, one provision of the landmark Tax Cuts and Jobs Act of 2017 has had a profound impact on many people who may have a taxable estate in the future. The law more than doubled the maximum that families can give their beneficiaries, either during their lifetime or as part of their estate, without incurring federal gift or estate taxes.

It’s important to note the amount is also indexed for inflation. For 2024, a single taxpayer can claim a federal estate and lifetime gift tax exemption of $13.61 million. Couples making joint gifts can double that amount.

This exemption has helped affluent families pass along substantial gifts tax-free. But time is running out for most taxpayers as it remains in effect only through the end of 2025. After that, amounts are scheduled to