Today we’re shedding some sunlight on a somewhat gloomy topic: estate planning. Estate law attorney, Adam Tarsitano, joins me to discuss how you can improve your estate plan. Listen in to learn why you may not look forward to the sunset in 2026, the difference in various trusts, and whether you should open a trust to avoid probate.
Why you may not look forward to the sunset in 2026
You may remember estate attorney Adam Tarsitano from episode 165 when we went over some spooky estate planning. Since the summer is a good time to revisit your estate planning documents, we thought it would be a great idea to invite him back. Listen in to learn how to enhance your today while planning for tomorrow so you can enjoy the ideal retirement.
In 2026 the federal estate tax exemption is set to expire. At the current level, very few people have to worry about paying federal estate taxes. Individuals can pass on $12.92 million to their heirs without tax worries. However, in 2026, this amount is set to be cut in half while allowing for inflation adjustments.
How you can fully utilize the gift tax exemption
This means approximately $7 million will be the limit for the estate tax exemption. Will this affect your financial plan? If your assets are close to this number, it’s best to plan now.
One way to lessen the tax burden for your heirs is to use the gift giving exemption. Individuals can gift $17,000 to other individuals each year. This means that, if you are married, you and your spouse could potentially gift up to $68,000 in one calendar year to your child and their spouse.
If you would like to include your grandchildren in the gifting you can set up a Crummey trust for them. Listen in to hear how the Crummey trust works and whether this would be a good idea for your grandkids.
Revocable vs irrevocable trusts
You may want to consider setting up a trust for your heirs. If you do, think carefully about whether to use a revocable or irrevocable trust. An irrevocable trust is set in stone and very hard to change, so may not be the best choice for a younger person’s estate plan. A revocable trust is also called a living trust and can be modified more easily. Consulting with an estate planning attorney is the best idea before setting up any trust.
The charitable remainder trust vs the charitable lead trust
If you are charitably inclined you may want to set up a charitable remainder trust or a charitable lead trust. These two trusts are the opposite of each other. The charitable remainder trust is an irrevocable trust that leaves the remainder of your assets to the charity beneficiary. The charitable lead trust names the family as the remainder beneficiary.
Listen in to learn more about estate planning and to see if you need to set up a trust to avoid probate.
Outline of This Episode
[0:49] Why you won’t be looking forward to this sunset
[3:03] A couple of examples
[11:31] The Crummey trust
[14:40] Another example of a higher net worth couple
[17:21] On the charitable remainder trust
[18:44] Do I need a trust to avoid probate?
[21:43] Other things to consider
Resources & People Mentioned
Connect With Chad and Mike
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Allison Berger
As an experienced Financial Advisor and partner, Allison builds custom financial solutions to enhance today and enrich tomorrow for our Wealth Management clients. Allison has a particular interest in working with clients in or on the cusp of retirement who want to delegate their portfolio management so they can enjoy life.