10 Tips for Maximizing Your Financial Plan in 2023: Tip 8- Estate Planning

Tip number eight for maximizing your financial plan in 2023, as discussed by Matt Blocki, involves being aware of estate planning limits. Currently, the tax law allows for an exemption amount of $12.92 million per spouse to pass on to the next generation without incurring a 40% tax.

However, Matt points out that this exemption is set to be reduced, possibly even cut in half, by the end of 2025, depending on political decisions. Additionally, individuals can gift up to $17,000 per year without touching this limit. For a high net worth individual, lifetime gifting can save substantial amounts in taxes, making it an essential consideration in estate planning.

Video Transcript

Hello, Matt Blocki with EWA. Today we are talking through ten tips for 2023 and how to maximize your financial plan. Tip number eight from maximizing your financial plan. 2023 is to be aware of estate planning limits.

So 2023, we still have the opportunity for were exemption amounts. The current tax law allows twelve point $92 million per spouse to pass on to the next generation without paying that 40% tax. From an estate planning perspective, something to be aware of that that’s going to get cut in half at the end of 2025 unless tax laws change and that is expected to get lowered depending on the political agreements that take place with the House and Senate shifts that we’ve seen.

The other thing to take note from an estate planning perspective is that without touching this limit, you can gift $17,000 per year. So if we have a spouse A and spouse B, and we have three kids, three kids total, each spouse can give 17 to child, 117 to child, 317 to child, child 217 to child three, and then same thing over here, 17 1717.

So that’s a total of 102,000 a year. So for someone that’s high net worth retired, has a goal to pass money on to the next generation is worried about being over this exemption every year that you do this and get the money either outright in your kids names or if they’re younger, most likely inside of a trust mechanism, an irrevocable trust.

Doing so on 102,000, that’s going to save you 40,800 per year in tax, assuming that those dollars would have otherwise been above the exemption. When you pass. So for a high net worth individual, something to consider is lifetime gifting.

Because these limits per spouse, per kid are under the reporting requirements and do not affect the ending number. From an estate planning perspective, you our channel.

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Playlist

10 Tips for Maximizing Your Financial Plan in 2023

10 Tips for Maximizing Your Financial Plan in 2023: Tip 1- 401ks and 403bs
10 Tips for Maximizing Your Financial Plan in 2023: Tip 2- Roth IRAs
10 Tips for Maximizing Your Financial Plan in 2023: Tip 4- Allowable Income for 401k and 403b
10 Tips for Maximizing Your Financial Plan in 2023: Tip 3- Traditional IRA Planning
10 Tips for Maximizing Your Financial Plan in 2023: Tip 5- Social Security Tax
10 Tips for Maximizing Your Financial Plan in 2023: Tip 6- HSA's
10 Tips for Maximizing Your Financial Plan in 2023: Tip 7- Tax Bracket Management
10 Tips for Maximizing Your Financial Plan in 2023: Tip 9- 529 Plans
10 Tips for Maximizing Your Financial Plan in 2023: Tip 10-Standard Deduction

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