At Key Financial, we help families optimize their legacy.
Estate and gift taxes have a long history, dating back to ancient Egypt, and were first introduced in the United States through the Revenue Act of 1916. Since then, the tax landscape has undergone considerable evolution, with the most significant simplification resulting from the American Taxpayer Relief Act of 2012 and subsequent legislation.
Today’s estate planning environment is more favorable than ever for most families. Current law provides a combined inflation-adjusted exemption of $15 million per person for estates and gifts, which doubles to $30 million for married couples. According to the Tax Policy Center, an estimated 99.8% of estates won’t owe any federal estate tax. This means that for most families, the focus of estate planning has shifted away from tax minimization and toward ensuring your wealth passes smoothly to your loved ones according to your wishes.
While federal estate taxes may not be a concern for most families, that doesn’t mean estate planning is simple. It’s important to note that some states impose their own inheritance or estate taxes with much lower exemption thresholds. Additionally, recent changes like the SECURE Act 2.0 have introduced new income tax planning considerations for inherited retirement accounts, and regulations around step-up in cost basis continue to evolve. These are just a few examples of how quickly the landscape is changing—existing wills and trusts may not achieve the outcomes many people expect, or worse, could tie up assets unnecessarily.
Many families assume that having a will means all their affairs are in order. However, your will only controls assets that don’t have beneficiary designations. This means your retirement accounts, life insurance policies, and bank accounts with designated beneficiaries will pass directly to those named individuals—completely bypassing your will, regardless of what it says.
This is just one example of the common gaps in estate planning that can create unintended consequences for your family. A comprehensive estate plan goes beyond basic wills to address beneficiary coordination, digital assets, tax strategies, and ensuring all your accounts work together to achieve your goals. Let’s schedule a time to review your complete financial picture and make sure your family’s future is protected according to your wishes.
*Please Note: Limitations. The scope of any financial planning and consulting services to be provided depends upon the terms of the engagement, and the specific requests and needs of the client. Key Financial, Inc. does not serve as an attorney, accountant, or insurance agent. Key Financial, Inc. does not prepare legal documents or tax returns, nor does it sell insurance products. Please Also Note: Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Key Financial, Inc.) or any planning or consulting services, will be profitable, equal any historical performance level(s), or prove successful.
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