Allow me to bring to your attention an important matter regarding changes to the estate tax exemption. In 2026, as a result of the sunsetting provisions of the Tax Cuts and Jobs Act (TCJA), there will be significant modifications to this exemption. It is my aim to ensure that you are well-informed about these upcoming adjustments and their potential impact.
Though 2026 seems far away, it’s essential to start preparing now for such sweeping changes, even if Congress modifies or extends current provisions in the interim.
With that in mind, here’s the latest on the estate tax exemption.
The Big Picture
Currently, individuals benefit from a lifetime estate and gift tax exemption of approximately $12.92 million, allowing for significant tax-free gifts during their lifetime or after passing.
Starting in 2026, however, this exemption is set to revert to its previous level of $5 million (to be adjusted for inflation), significantly reducing tax-free gifts.
The Potential Repercussions
This reversion could lead to significant tax liabilities for those whose estates surpass the reduced exemption limit of $5 million (an estimated $7 million adjusted for inflation). If your assets exceed this threshold, your heirs could find themselves with a hefty tax burden.
Our Proactive Approach
While this change may appear daunting, it presents an opportunity to take proactive measures now. Today’s exemption level allows us to redistribute your wealth to minimize tax implications in 2026 by utilizing gifting strategies, leveraging educational or medical exclusions, and/or establishing trusts.
Additionally, the 2024 presidential election could bring further tax law changes, adding complexity to the 2026 sunset scenario.
As these changes approach, rest assured I’m here to provide guidance every step of the way. Estate planning is not just about numbers; it’s also about your goals and the legacy you desire to leave for your loved ones.
This material is intended for informational purposes only, and is not intended to provide tax advice. Please consult your tax advisor for tax advice for your specific situation.
About John Mateyko
John Mateyko is a seasoned financial advisor with an impressive track record spanning over 20 years. Nestled in the charming community of Serenbe, GA, John serves as the Managing Partner of IDEX Financial, a company he founded in 2010. With a focus on creating sustainable retirement income plans, John aims to utilize his expertise and experience to assist clients in achieving their financial goals.
John’s journey into the world of finance began after completing his studies in business and philosophy at Augustana College. This educational foundation propelled him into a successful career, where he held prominent positions at renowned firms including Morgan Stanley, Atlas Securities, US Bank, and JP Morgan Chase. Throughout his professional tenure, John Mateyko consistently garnered recognition for his exceptional portfolio management abilities.
A testament to his commitment to excellence, John holds several esteemed certifications. As a Fiduciary Financial Planner, he ensures that his clients’ best interests always come first. Additionally, his certifications as a Wealth Management Certified Professional (WMCP), Retirement Income Certified Professional (RICP), and Accredited Portfolio Management Advisor (APMA) highlight his comprehensive knowledge and dedication to continuous learning. Currently pursuing the Certified Investment Management Analyst (CIMA) program at the prestigious Yale School of Management, John displays his unwavering pursuit of professional growth.
At IDEX Financial, John focuses on guiding clients through the complexities of retirement planning. Recognizing that each individual has unique financial circumstances, he employs a personalized approach to tailor strategies that aim to align with their specific needs. Aiming to provide well-informed advice and foster peace of mind, John’s goal is to ensure his clients can make confident decisions about their financial future.
Beyond his professional endeavors, John cherishes his family and community. Alongside his wife, son, and their beloved family dog, he takes pride in being a part of the Serenbe community. Located in rural Georgia, Serenbe emphasizes wellness, community, and nature. With an abundance of scenic trails, it offers residents and visitors the opportunity to immerse themselves in the beauty of nature.
In conclusion, John Mateyko is not only an accomplished financial advisor but also a dedicated family man and proud member of the Serenbe community. With his expertise, commitment to continuous learning, and personalized approach, John strives to make a positive impact on the lives of his clients and the community he calls home.