At Blue Chip Estate Planning, we’re closely watching the developments — or lack thereof — coming out of Washington. As the year progresses, no one can say for sure whether Congress will take action before key provisions of the 2017 Tax Cuts and Jobs Act expire at the end of 2025. While it’s possible new legislation could be passed to extend or modify the current rules, it’s equally possible that Congress will remain gridlocked, allowing the law to sunset automatically — and with it, a significant reduction in the federal estate tax exemption.

What’s Changing?

The TCJA temporarily increased the federal estate tax exemption to historically high levels — currently about $14 million per person (or roughly $28 million for a married couple). But if Congress does not pass new legislation, the exemption will revert to its pre-2018 level on January 1, 2026. Adjusted for inflation, this would bring it down to about $7 million per individual, or $14 million for a couple.

For Michigan families with estates valued under $14 million, this change may not pose an immediate concern. But for those with assets between $14 million and $28 million — currently sheltered under the higher exemption — the potential tax liability could be significant.

What Is Congress Doing?

At this point, no one knows for certain what Congress will decide. Several bills have been introduced in the U.S. House of Representatives, including:

• H.R. 601, which proposes cutting the estate tax rate in half

• H.R. 1301, which calls for a full repeal of the federal estate and generation-skipping transfer taxes

Other proposals suggest smaller adjustments without eliminating the tax entirely. However, none of these bills have advanced out of committee, and with political uncertainty high in an election year, it’s difficult to predict what — if anything — will pass.

Why Advanced Planning Matters Now

Even though we don’t yet know what Congress will do, waiting until the law changes is not a wise strategy. Estate planning is most effective when done in advance — especially when the window of opportunity to take advantage of current exemptions may be closing.

Here at BCEP, we are already working with clients to review their estate plans and explore advanced planning options such as:

• Gifting strategies to lock in today’s higher exemption amounts
  
• Irrevocable trusts to remove appreciating assets from the taxable estate
  
• Spousal Lifetime Access Trusts (SLATs) and other sophisticated tools for high-net-worth families

Don’t Wait Until It’s Too Late

If your estate could be impacted by the coming changes — or if you’re unsure where you stand — now is the time to meet with a qualified estate planning attorney. The decisions Congress makes (or doesn’t make) in 2025 could dramatically change the financial landscape for you and your loved ones.

At Blue Chip Estate Planning, we’re here to help you navigate this uncertainty with confidence and clarity. Let’s put a plan in place that protects your legacy — no matter what the future holds.

Contact us today to schedule a consultation.