If you’re in a high-net-worth family, 2025 might be your final window to use the generous federal estate tax exemption—right now it’s around $13 million per individual.

Beginning January 1, 2026, the exemption is set to shrink almost by half, going down to around $7 million.

This change means that millions of dollars in potential tax savings could vanish almost overnight if you don’t act while you still can.

A child smiling while an adult guides her hands to hold a small house model; a contract and notebook with a pen and stamp are on the wooden table in front of them.

What Does This Mean for You and Your Family?

Think of the federal estate tax exemption as the portion of your estate you can leave to your loved ones without having to pay federal estate taxes.

Right now, the law allows each person to exempt about $13 million from estate taxes—so couples can protect nearly $26 million—because of the 2017 tax changes, thanks to the Tax Cuts and Jobs Act of 2017.

But I want to be real with you—unless Congress acts, the rules will flip back to pre-2018 standards in 2026.

If you’re handling a larger estate, this drop means you might owe taxes on more of what you’ve worked hard for.

The tax hit could be so big for your heirs that they might need to sell important things, like property or a business, just to manage the bill.

People browse through books displayed on an outdoor table. One person holds a large book with botanical illustrations on the back cover. Others wear jackets and face masks, with sunlight illuminating the scene.

The Clock Is Ticking: Why Now?

Since the exemption is taking such a big hit, your chance to safeguard your wealth at this higher level is slipping away quickly.

If you don’t take action before the end of 2025, your estate could face millions more in taxes than it would this year.

The phrase “use it or lose it” couldn’t be more true here—you need to take full advantage of the current $13.99 million exemption by using estate planning strategies that transfer your wealth efficiently while reducing your tax burden.

Let me be honest—if you don’t make the most of the $13 million exemption now, you could miss out on huge savings.

Smart estate planning can help you pass on your wealth without unnecessary taxes.

A person wearing a ring touches documents on a table, near a small model house and a red car, representing real estate or home insurance.

How to Protect Your Estate from the Tax Hit

To make sure your family’s wealth stays safe, consider leaning on your estate planning attorney or financial advisor to guide you through these strategies.

1. Gifting Strategies

One of the simplest ways to lower your taxable estate is by giving gifts while you’re still alive.

Did you know the IRS lets you gift up to $19,000 to someone each year without any tax? That’s the 2025 limit.

More importantly, any gifts you make during your lifetime reduce your $13 million exemption.

By making gifts now, you’re locking in the higher exemption before it goes down.

2. Trust Planning

Trusts are powerful tools that help you protect your assets and keep control over them, while also potentially lowering your estate taxes. Consider this:

Irrevocable Trusts: By placing your assets in an irrevocable trust, you remove them from your taxable estate, helping to lower the taxes your estate will face.
Spousal Lifetime Access Trusts (SLATs): These trusts let you create a permanent trust for your spouse and kids, so you can move assets but still keep some control behind the scenes.
Generation-Skipping Trusts: If you want to leave money to your grandchildren and keep estate taxes from cutting in at every generation, this helps.

3. Business Valuation Freezes

If you’re running a business, freezing its value now lets your heirs get the future upside without increasing your taxable estate.

By freezing the business’s current value for estate tax purposes, any future growth happens outside your estate, which lowers the taxes owed when you pass.

4. Asset Transfers

It’s worth considering transferring assets that are growing in value while the exemption amount is still generous. Some ways to do this are:

Real estate
Investment portfolios
Interests in family businesses

Getting these assets out of your estate now means you won’t miss out on the bigger exemption that’s going away soon.

5. Family Wealth Preservation

If you want to protect your family’s hard-earned wealth, trusts and gifting are key tools beyond just handling taxes—they guard against creditors and divorce too.

Setting up the right trust helps you decide exactly when and how your loved ones get their inheritance, so your hard-earned wealth truly lasts for generations.

A person with short, light hair sits at a wooden table, working on a laptop in a cozy, sunlit room. A notebook, pen, cup, and yellow flower in a vase are on the table, with stairs and plants in the background.

What Happens If You Wait?

If you wait to do your estate planning until after the exemption drops, your heirs might end up paying much more in estate taxes.

For example, a $20 million estate currently shelters $13 million from tax, but in 2026, only about $7 million would be exempt, exposing $13 million of the estate to taxation rather than $7 million.

This increase could mean your family owes millions more in estate taxes to the IRS—money that could otherwise stay right where it belongs, with your loved ones.

Take Action Today

Estate planning might seem overwhelming, but with the right strategies designed just for your family, you can safeguard your wealth and protect the legacy you’ve worked hard to build.

Here’s what to do now:

Schedule a meeting with your estate planner or financial advisor.
Review your current estate plan in light of the upcoming exemption reduction.
Discuss gifting strategies to utilize the $13 million exemption while it lasts.
Explore trust options, business valuation freezes, and other advanced techniques.

The federal estate tax exemption is shrinking, and it’s one of those rare moments where being prepared really matters.

Ready to protect your family? Let’s get your estate plan in place before the change hits.

Your legacy is worth protecting. Don’t lose millions. Use your exemption before it disappears.

Tell us what’s happening, and we’ll contact you soon.