Susan Kaplan – TFG Financial Advisors

Retirement Plan Limits Rise for 2024 and IRA Contributions Continue Until Tax Deadline

Retirement Plan Limits Rise for 2024, IRA Contributions Continue Until Tax Deadline

Have you heard the good news? The IRS announced late last year that the amount individuals can contribute to their 401(k) plans in 2024 has increased to $23,000, up from $22,500 for 2023. The catch-up contribution limit for aged 50 and over remains at $7,500. This means if you are 50 yrs or older you can contribute up to $30,500, starting in 2024! The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans also remains at $3,500, for 2024.

And IRA limits on annual contributions also increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 to include an annual cost‑of‑living adjustment, but it remains at $1,000.

But there’s more good news! You still have time to take advantage of contributions to your retirement accounts for tax year 2023. While the December 31, 2023 deadline for 401(k) contributions has passed, you can still put money into either traditional or Roth individual retirement accounts (IRAs), up until the tax deadline of April 15, 2024.

Contributions can also be made to employee-based plans including simplified employee pension plan (SEP) IRAs and savings incentive match plan for employees (SIMPLE) IRAs. You have up until the due date of your business’s income tax return for the year, including extensions. Traditional IRA contributions are also tax deductible, which lowers your taxable income for 2023. Tax deductions for IRAs do have some restrictions, however, including your income and whether you participate in a workplace retirement plan already.

You should also keep in mind that your total contributions for traditional and Roth IRA accounts are limited to $6,500 for 2023. Those 50 and older can contribute an additional $1,000 for a total of $7,500. If you go over, you’ll owe a 6% tax each year on the excess amount in your account.

And if you have a Roth IRA, remember there are contribution limits based on how much money you make. For single filers in tax year 2023, the amount you’re allowed to contribute begins phasing out in increments if you earn $138,000 or more, stopping completely if you earn $153,000 or more.

For joint filers in tax year 2023, the range is $218,000 to $228,000. More information on contribution limits can be found on the IRS webpage HERE.

SEP and SIMPLE IRAs have more generous 2023 contribution limits. SEP contributions can’t exceed the lesser of either 25% of the employee’s compensation, or $66,000. SIMPLE plans have 2024 contribution limits of $15,500.

More tips: If you are making 2023 IRA contributions in 2024, be sure to specify that it’s for 2023 with your IRA custodian. Did you forget about 401(k) plans from previous jobs? Do you have any retirement accounts collecting dust? Keeping track of these can help you get the most out of the money you’ve already saved. If you do find money you’d forgotten about in an old plan, we can educate you on your options.

CONTACT US: The 401(k) contribution limit for 2024 is $23,000 for employee contributions and $69,000 for combined employee and employer contributions. The advantage to maximizing retirement contributions for the year is that these accounts allow your retirement savings to grow faster with compound interest. The earlier you contribute, the more time your money has to grow. We have other great ideas to help your nest egg grow. Contact Cory Lyon, TFG Financial Advisor, at 561-209-1120 or clyon@tfgfa.com.

TFG Financial Advisors, LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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by Susan Kaplan

What to Know About Working in Retirement Years

What to Know About Working in Retirement Years

Think you’ll have more money, and/or make it last longer if you work during your retirement years? Maybe, if you pay attention to income limits and delay taking your benefits until your full retirement age.

When to begin your retirement is a very personal decision and depends on many factors: health, current income, and financial need. Advantages to working as a retiree might include earning extra income to help pay expenses, preventing boredom, and making social connections. However, there are possible disadvantages to consider as well, including a potential impact on Social Security benefits and taxes.

The important variable to keep in mind is that the age you begin receiving Social Security benefits will impact your monthly payout. You can start receiving your Social Security retirement benefits as early as 62, however, you aren’t entitled to “full” benefits until you reach your “full” retirement age. And, the longer you can wait the better the payout. You can choose to delay taking your benefits past your full retirement age, 66 for people born 1943 to 1954, up to age 67 for people born afterwards: If you wait until you reach age 70, you get an extra 2/3 of 1% for each month’s delay, totaling 8% for each full year. For example, if you would receive $1,000 per month at your full retirement age of 66, delaying your benefits to age 70 would boost your monthly check to $1,320.

If you decide to delay your benefits until after age 65, do not overlook your Medicare eligibility! You still need to apply for Medicare benefits within three months of your 65^th birthday. If you wait longer, your Part B Medicare medical insurance and Part D prescription coverage may cost you more.

Here are a few other important things to consider about working in retirement years:

Work income can temporarily reduce Social Security

Once you start Social Security, the government sets limits on how much you can earn, depending on your age. If you’re younger than your full retirement age, you can earn up to $22,320 in 2024. Social Security will reduce your check by $1 for every $2 you make above the annual limit.
In the year you reach your full retirement age, you can earn up to $59,520. Social Security reduces your check by $1 for every $3 you make above the limit but only counts the months until your birthday. After you reach your full retirement age, work income no longer reduces your Social Security check.
The reductions aren’t lost money, however. Social Security carries the benefit forward to give you a larger check later in life. Be careful budgeting though, if you were originally counting on the entire check plus work earnings.

Can I suspend my Social Security benefits if I go back to work?

Once you’ve reached your full retirement age of 66 to 67, you can suspend your Social Security benefit if you decide to jump back into the workplace, which means you stop receiving checks. Why would anyone do that? Because suspended benefits can earn a “delayed retirement credit” that boosts the amount you can receive (see above). People who regret starting their checks early can suspend their benefits at full retirement age and profit from this delayed retirement credit. If you suspend your benefit, however, remember that also suspends any spousal benefit your husband or wife may be receiving based on your work record.

You can keep contributing to retirement funds if you’re still working after 70½

The age limit for contributing to an IRA has been eliminated, and you can contribute to a current employer’s 401(k) until you leave that job. If you’re self-employed, you can keep contributing to SEP-IRAs or solo 401(k)s.

You still need to take RMDs from retirement accounts

When you turn 73, you must take required minimum distributions (RMDs) out of your pre-tax retirement accounts, such as a 401(k) or a traditional IRA. If you’re still working and don’t need the money, you can delay RMDs from your current retirement plan until you leave the job. However, you still need to take RMDs from your traditional IRA and retirement plans from past employment.

Working in retirement may affect your taxes

If you’re receiving Social Security and working or receiving other income such as a pension, income from retirement funds or other investments, at least some of your Social Security benefits likely would be subject to taxation.

Social Security taxation is based on your “combined income” — your adjusted gross income, plus any tax-exempt bond interest, plus one-half of your annual Social Security benefits. AGI includes any money you earn and taxable distributions you take from retirement funds.

Working later helps your savings last

It is common nowadays for people to live well into their 90s and beyond, and this creates a real risk of outliving savings. Having income from work means you may not have to dip into your savings. Even if it is part-time work that doesn’t cover all your expenses, it could be helpful. Working later also creates more time to contribute to retirement plans, and these investments will have more time to grow. And you might even qualify for other workplace benefits with financial value.

Leaving a Medigap plan for workplace coverage is risky

After you join Medicare, beware of leaving for a company health plan if you bought a Medigap plan to cover the Medicare out-of-pocket costs. If you only have Medicare, you are responsible for substantial deductibles and copayments. Medigap plans cover these costs in exchange for a monthly premium.

You are guaranteed to qualify for Medigap plans the first time you join Medicare. After that, most states allow insurers to use medical underwriting for applicants meaning you could be denied for pre-existing conditions. You could still purchase a Medicare Advantage plan to cover the out-of-pocket costs without medical underwriting, but these often have less coverage and more restrictions on provider networks than Medigap plans.

Reach out to us: Searching for retirement planning or answers to your questions about Social Security? TFG Financial Advisors can help you set future financial goals and create a plan so you have a nest egg for retirement. Contact our Registered Social Security Advisor, Paul Wieseneck CPA, RSSA, at PWieseneck@fuoco.com or by calling 561-209-1102.

TFG Financial Advisors, LLC, is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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by Susan Kaplan

Your Money Under the IRS Microscope

Your Money Under the IRS Microscope

Your money may be under the IRS’ microscope in 2024. You may have heard cries of “Tax the Rich” recently in articles, speeches, primary posturing, and most probably at the State of the Union. New IRS audits of business aircraft use are just the beginning of a new level of scrutiny to come. It seems U.S.A. millionaires and billionaires are evading more than $150 billion a year in taxes, adding to growing government deficits and creating a “lack of fairness” in the tax system. Can a “minimum tax” be far behind?

Of course, if you are wealthy you might want to argue that tax hikes for the top 1% will not fully solve the entitlement crisis, prop up Social Security for the foreseeable future and instead will hurt economic growth. States that have raised taxes on the ultra-rich have not increased revenue, in fact the millionaires and billionaires just picked up and moved to a more tax-friendly state.

On another note, the good news for the mega-wealthy is that inflation eases the 2024 tax bite on capital gains, estates, and other wealth-related income. Next year, long-term investors will see more of their capital gains fall into lower tax rate brackets. If you turned your market savvy into millions, you can pass along even more of your estate tax-free to heirs, even while you’re still alive.

Capital Gains Tax

If most of your income is a result of your investments, you know that when investments are long-term, the profit they produce is taxed at a lower rate. The tax rates on the proceeds from assets held for more than a year are 0%, 15%, and 20%. Which one applies depends on your overall income and filing status.

Thanks to changes made by 2017’s Tax Cuts and Jobs Act (TCJA), there are separate income brackets for the three capital gains tax rates. The earnings to which the three long-term capital gains tax rates will apply in 2024 are shown in the table below:

2024 Tax Year	Capital Gains Taxable Income Brackets by Filing Status
Long-Term Capital Gains Tax Rate	Single	Head of Household	Married Filing Jointly or Surviving Spouse	Married Filing Separately
0%	$0 to $47,025	$0 to $63,000	$0 to $94,050	$0 to $47,025
15%	$47,026 to $518,900	$63,001 to $551,350	$94,051 to $583,750	$47,026 to $291,850
20%	$518,901 and more	$551,351 and more	$583,751 and more	$291,851 and more

(In addition to capital gains tax rates listed in the tables, higher-income taxpayers may also have to pay an additional 3.8% net investment income tax.)

Capital Gains Taxes on Estates and Trusts

For 2024, the maximum zero capital gains tax rate applies to estates or trusts worth up to $3,150. The top earnings level for an estate or trust to be taxed at 15% is $15,450. The 20% rate applies to the entities worth $15,451 or more.

Five years ago, the TCJA expanded the estate tax exemption amount even more (at least until the TCJA expires at the end of 2025 or is changed before then). The exemption also is adjusted for inflation. For 2024, the inflation adjustment means an individual can leave heirs a tax-free estate of up to $13.61 million. That’s per person, so a married couple can protect $27.22 million from estate taxation. When an estate exceeds those tax-year amounts, then and only then is the federal estate tax, which can go as high as 40%, assessed on the overage.

Estate and Trust Tax Rates

There’s also a tax, with its own rate schedule, on earnings from trusts and estates. This applies to income that trustees choose to retain rather than distribute to beneficiaries. The estate and trust tax rates for 2023 and 2024 are shown in the table below:

Trusts and Estates Tax Rates and Income Brackets
Rates	2023	2024
10%	$0 to $2,900	$0 to $3,100
24%	$2,901 to $10,550	$3,101 to $11,150
35%	$10,551 to $14,450	$11,151 to $15,200
37%	$14,451 and more	$15,201 and more

(A dozen states and the District of Columbia still have either an estate or inheritance tax.)

Tax-Free Gifting

Want to share your wealth while you are still around to get a thank you for your generosity? Giving away some of your assets could help keep your some of your estate out of Uncle Sam’s hands when you pass on. The tax code allows you to give a specific amount, known as an annual exclusion, in gifts to others. This will help reduce your estate’s value and there’s no tax ramifications for the gift recipients.

For 2024, that exclusion amount is $18,000 per person. Like the estate tax exemption, the gift exclusion limits each year are per person. That means if you’re married, you and your spouse each can give a combined $36,000 to the same person in 2024, and there’s no familial relationship requirement.

Also, the gifts are not limited to dollars. You can give assets valued up to the limit, such as gifts of real property and family heirlooms. This is a good way to dole out your estate the way you want and keep its value under the amount that will trigger the federal estate tax. as long as you follow the rules, you won’t face any gift tax, and your gifts are not taxable to the recipients.

However, if you go over the lifetime gift exclusion, you will owe a 40% tax on those excessive gifts. The lifetime gift exclusion is the same as the annual estate tax exemption amount. Again, thanks to inflation that’s $13.61 million (or $27.22 million per married couple) in 2024.

REACH OUT TO US: Wealthy enough to worry about the latest estate and other wealth-related taxes and the inflation adjusted amounts? When it comes to inter-generational income and how to enhance it, preserve it, and distribute it wisely, things can get complicated. To be sure every transaction is tax-advantaged, and every outcome perfectly positioned for the future, it is important to work with a financial and tax adviser like those at TFG Financial Advisors. Even if your wealth is still in the aspirational stage, you should consider working with a wealth management professional to protect your nest egg. Feel free to contact me, Cory Lyon, directly at 561-209-1120, with any questions. At TFG Financial Advisors, our goal is to assist you in making informed decisions. We believe in personalized asset management, and I act as a fiduciary for all my clients.

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What's Ahead for Retirement Catch Up Contributions?

What's Ahead for Retirement Catch Up Contributions?

The SECURE 2.0 Act implemented changes to catch-up contributions and is applicable to 401(k), 403(b), or 457(b) plans for participants age 50 and older, and whose income from the prior year exceeded $145,000. It mandated that catch-up contributions must be made as Roth contributions (after tax basis) for those earning more than $145,000. Originally, this was set to become effective starting in 2024. However, on August 25, 2023, in response to many employers urging for an extension, the IRS granted a 2 year delay in the effective date.

This means employers don’t need to add Roth as an option to retirement plans for those earning $145,000 before 2026 to comply with the Section 603 rule. During the transition period, catch-up contributions can continue on a pre-tax or Roth basis until 2026 regardless of a plan participant’s income.

Additionally, the IRS notice addressed the technical error that would have effectively eliminated all catch-up contributions – Roth and pre-tax – beginning in 2024. The notice makes clear that going forward, Roth and pre-tax catch-up contributions can continue to be made by plan participants who are age 50 and older! Employees over age 50 may contribute an additional (“catch-up”) amount of up to $7,500 for 2023.

Feel free to contact me, Cory Lyon, directly at 561-209-1120, with any questions regarding customized financial strategies for your personal estate as well as your business. Our goal is to assist you in making informed decisions. We believe in personalized asset management and estate planning, and I act as a fiduciary for all my clients.

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FAQs About QCDs For The Charitable Minded

FAQs About QCDs For The Charitable Minded

Did you know that, if you are at least 70½ years old, you can make tax-free charitable donations directly from your IRA?

Making a Qualified Charitable Distribution (QCD) can exclude up to $100,000 annually from gross income while benefitting your favorite charity. These “charitable IRA rollovers” are gifts that would otherwise be taxable IRA distributions!

It’s easier than you think to make a QCD. Instruct your IRA trustee to distribute directly from your IRA to a qualified charity of your choosing. The distribution must be one that would otherwise be taxable to you. You can exclude up to $100,000 of QCDs from your gross income each year. If you file jointly, your spouse (if 70½ or older) can also exclude $100,000 of QCDs.

A QCD can provide several potential benefits. It may be a suitable giving strategy for donors who:

Are required to take a minimum distribution from an IRA, but don’t need the funds and would face increased tax liabilities if they took the distribution as income.
Would like to reduce the balance in an IRA to lower future required minimum distributions.

Some Rules Apply:

Your QCD cannot be made to a private foundation, donor-advised fund, or supporting organization. Beginning with 2023, you will be able to make a one-time QCD of up to $50,000 to a charitable remainder annuity trust, a charitable remainder uni-trust, or charitable gift annuity.
QCDs count toward satisfying any Required Minimum Distributions (RMDs) that you would otherwise have to receive from your IRA. The caveat is that distributions you actually receive from your IRA (including RMDs) and subsequently gift or transfer to a charity cannot qualify as QCDs.
If you plan to offset your RMD with a QCD, the transactions must be done in conjunction with one another. You cannot take an RMD and retroactively use those dollars to make a QCD. That would conflict with the “first-dollars-out rule,” which states that the first dollars taken from your IRA will satisfy any required RMD.

Cautionary Notes:

You aren’t allowed to deduct QCDs as a charitable contribution on your federal income tax return — that would be double-dipping!
Any QCD must be an otherwise taxable distribution from your IRA. If you’ve made non-deductible contributions, then normally each distribution carries with it a pro-rata amount of taxable and nontaxable dollars. However, a special rule applies to QCDs — the pro-rata rule is ignored, and your taxable dollars are treated as distributed first.
If you have multiple IRAs, they are aggregated when calculating the taxable and nontaxable portion of a distribution from any one IRA.

Remember you can also name a charity as beneficiary of your IRA, and the charity will not have to pay any income tax on distributions from the IRA after your death.

After your death, distributions of your assets to a charity generally qualify for an estate tax charitable deduction. If a charity is your sole IRA beneficiary, the full value of your IRA will be deducted from your taxable estate for purposes of determining the federal estate tax (if any) that may be due. This can also be a significant advantage if you expect the value of your taxable estate to be at or above the federal estate tax exclusion amount currently $12,920,000.
If retirement funds are a major portion of your assets, another option to consider is a Charitable Remainder Trust (CRT). A CRT can be structured to receive the funds free of income tax at your death and then pay a (taxable) lifetime income to individuals of your choice. When those individuals die, the remaining trust assets pass to the charity.
Finally, another option is to name the charity and one or more individuals as co-beneficiaries.

Reach Out To Us: A QCD may be better for you than a charitable deduction because the IRA assets go directly to charity, so donors don’t report QCDs as taxable income, and don’t owe any taxes on the QCD, even if they do not itemize deductions. Some donors may also find that QCDs provide greater tax savings than cash donations for which charitable tax deductions are claimed. If you have securities that have grown in value since you bought them, it may make more sense and provide greater tax benefit to donate them to charity instead of taking a QCD. We can help you make educated choices for charitable giving in tandem with your estate-planning attorney. Contact Cory Lyon, Financial Advisor, at 561-209-1120, or Paul Wieseneck, CPA, at 561-209-1102, for questions on this topic.

TFG Financial Advisors, LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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Is A 1031 Exchange Right For You?

Is A 1031 Exchange Right For You?

What is a 1031 Exchange? It is a way to leverage your gains. It allows sellers of investment or business-use real estate to defer paying capital gains, and depreciation recapture taxes, when they use the proceeds of the sale to purchase one or more additional pieces of investment or business-use real estate.

IRS Code 1031 helps investors because deferring tax results in more money to invest in new property. Generally, any real property can be exchanged, provided it is held “for productive use in a trade or business” or for “investment” and is exchanged for property of “like-kind” that will also be held for one of these same purposes. To qualify for tax deferral, sellers must comply with the strict timelines and rules set forth, and proceeds of the sale should be placed with a third party known as a Qualified Intermediary, until the purchase.

There are 4 types of Exchanges:

Simultaneous Exchange occurs when two properties are exchanged simultaneously.
Forward Exchange, occurs when a property is sold (Relinquished Property) and another property is purchased (Replacement Property) within 180 days.
Construction Exchanges, or Build-to-Suit Exchanges, occur when the taxpayer uses the funds from the sale of the Relinquished Property to construct improvements on the Replacement Property.
In a Reverse Exchange, the Replacement Property is purchased before the sale of the Relinquished Property.

It’s pretty obvious why a 1031 is a valuable tool for real estate investors. Instead of paying taxes, increase your down payment and your buying power to acquire a more expensive replacement property. The flexibility of a 1031 allows you to exchange one property for several others, or consolidate multiple properties. Cash flow and overall income can both be increased through a 1031 tax-deferred exchange. For example, a vacant parcel of land that generates no cash flow or depreciation benefits, can be exchanged for a commercial building that does.

It’s easier than you think to save tax on capital gains. A 1031 Exchange can be done in 5 steps:

While contemplating the sale of an investment property, contact our TFG Accounting and Tax Professionals beforehand about a 1031 Exchange instead.
Enter into a contract and open an escrow account on the relinquished property.
Identification period of 45 days after the closing of intent to “exchange.”
Finalize the exchange with the replacement property within 180 days.
Enjoy a fully tax deferred transaction!

FAQs:

What Qualifies As A Like-Kind Property?

Properties must be of the same nature or character, even if they differ in grade or quality. Here are a few examples of a like-kind exchange:

A vacant property for an industrial building
An apartment building for a medical complex
A hotel for a shopping center
A retail property for a multi- or single-family rental
An office building for interest in a Delaware Statutory Trust (DST)

Can I Pull Proceeds Out After The Sale Of The Relinquished Property?

No, the full value of relinquished property must be reinvested; this includes the proceeds from the sale and the debt the investor had on the property.

How Do I Avoid/Defer Paying Taxes On Selling My Rental Property?

Investors can leverage a 1031 exchange to sell their rental property so long as the rental property meets all the requirements outlined by the IRS. For example, a rental property can be relinquished and fractional ownership in a DST may be acquired, deferring capital gains. If a property is sold and not exchanged, the sale will be taxable.

CONTACT US: A 1031 Exchange is a popular estate planning tool and wise choice if you are looking for a way to increase your cash flow, depreciation benefit, consolidate properties, or relieve yourself of a high maintenance situation. Understanding the rules and timing is key to a successful exchange and preserving your wealth. Turn to Fuoco Group CPAs and TFG Financial Advisors for the skilled guidance you need to navigate a 1031! Contact me, Paul Wieseneck, CPA, Tax Director & Financial Advisor, at 561-209-1102 or at PWieseneck@fuoco.com.

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Protect Your Estate When Exemptions May Sunset In 2025

Protect Your Estate When Exemptions May Sunset In 2025

No matter how wealthy you are —human nature tends to make us put off attending to important matters. But this is no time to ignore the fact that the TCJA lifetime estate and gift tax exemption will sunset in 2025. We have another election coming up in 2024, and clients shouldn’t get comfortable with wishful thinking that maybe the sunset won’t come — since some leaders have proposed eliminating estate tax loopholes for the rich. Some of the tax planning techniques we now have available for estates and trusts may not be around when the rules sunset at the end of December 2025.

The lifetime estate and gift tax exemption for 2023 is $12,920,000. After 2025, the exemption will fall back to $5 million, adjusted for inflation, unless Congress agrees to extend the higher amount. The odds of any extension depend on which party controls the White House and Congress after the 2024 election.

Most tax-free gifts you make now won’t trigger post-2025 estate tax bills. Estates use the higher lifetime exemptions for gifts to calculate post-2025 estate taxes. So, many people who made or make big gifts from 2018 through 2025 won’t lose out on the benefit of the larger exemption amount if it drops back down in 2026.

But not all gifts would qualify. Under an IRS proposed regulation, completed gifts that are later included in the decedent’s gross estate at death would be subject to the exclusion amount in effect in the year of the donor’s death. Implicated strategies include grantor-retained income trusts and transactions involving promissory notes.

High-net-worth individuals and families should revisit their estate plan now. They will need to determine whether it makes sense to top off their lifetime gifts above the expected post-2025 exemption amount of approximately $7 million before they “lose” the excess exemption between $7 million and $12.92 million. Any difference between the current higher exemption amounts and the post-2025 reduced amounts will be lost if not used.

It is important for potentially affected individuals to work with both their financial advisor and attorney before making any substantial gifts to ensure that they have sufficient liquidity for future needs. Planning techniques, such as a Spousal Lifetime Access Trust (SLAT), can be an effective tool for estate planning because the beneficiary spouse retains access to the trust assets during life. When one spouse enjoys continued access to gifted assets, married couples retain a measure of financial security and peace of mind that allows them to consider using more exemption than would otherwise be palatable.

Other trusts that are designed with a wealth transfer strategy in place to systematically help clients in passing down assets include irrevocable trusts, but there are other more flexible alternatives to just transferring assets into an irrevocable trust to max out exemptions. Alternative ideas include:

Qualified personal residence trusts which erase the value of a personal residence from the total value of an estate;
Irrevocable life insurance trusts, which reduce the value of a policy’s death benefits within an estate;
Grantor-retained annuity trusts; and
Charitable remainder trusts that avoid capital gains taxes and provide a deduction when assets are transferred into it.

Trusts have to be properly executed before they can be funded, so waiting until late 2025 to take action is risky — it might result in a poorly designed trust that will be tough, to modify later when circumstances might change. Consider the alternative though……estates in excess of the lifetime limits may face a 40% to 45% tax on the amount above the levels in 2026; and after the end of 2025, federal individual tax rates, now topping 37%, will rise to 39.6%.

Reach Out To Us: Time is running out to begin planning for the upcoming changes to estate planning laws. 2025 seems far off but thoughtful estate planning takes time to develop and implement. If you believe you will have a taxable estate after 2025, be proactive and do not wait until closer to the deadline to discuss your situation with your TFG Financial Advisors and CPAs. Feel free to contact me, Cory Lyon, directly at 561-209-1120, with any questions regarding customized financial strategies for your personal estate as well as your business. Our goal is to assist you in making informed decisions. We believe in personalized asset management and estate planning, and I act as a fiduciary for all my clients.

TFG Financial Advisors, LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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