3 Key Estate Planning Considerations for 2025

As we approach 2025, estate planning continues to evolve in response to changing laws, financial landscapes, and societal trends. Whether you’re just starting to create an estate plan or looking to update your existing documents, here are three key considerations to keep in mind this year.

1. Changes to Estate Tax Exemptions

In 2025, the federal estate tax exemption may revert to pre-2018 levels, which can significantly reduce the amount individuals can transfer tax-free upon their passing. What does this mean for you? If your estate value exceeds the anticipated exemption threshold, you could face substantial estate taxes. To mitigate this, consider strategies like:

• Lifetime gifting: Use the current exemption to gift assets now, reducing your taxable estate.
• Irrevocable trusts: Tools like grantor-retained annuity trusts (GRATs) or charitable remainder trusts can help preserve wealth while minimizing tax burdens.
• Family Limited Partnerships (FLPs): These can facilitate asset transfers while providing flexibility and tax benefits.

2. Incorporating Digital Asset Management

Digital assets, including cryptocurrency, online accounts, and intellectual property stored electronically, are becoming an increasingly vital part of estate planning. Without proper documentation, these assets may be inaccessible to your heirs.

Key steps to manage digital assets effectively:

• Inventory: Create a detailed list of digital assets, including usernames, passwords, and access instructions.
• Legal authorization: Include provisions in your estate plan authorizing your executor or trustee to access and manage these accounts.
• Secure storage: Use a digital vault or other secure methods to safeguard this sensitive information.

By addressing digital assets, you can ensure your loved ones avoid unnecessary complications.

3. Planning for Longevity and Health Care Costs

With life expectancy increasing, more families are focusing on planning for long-term care and health-related expenses. The cost of care can deplete estates rapidly if not accounted for.

Here’s how to prepare:

• Long-Term Care Insurance: Helps cover the costs of assisted living, nursing homes, or in-home care.
• Health Care Directives: Ensure your medical wishes are documented and appoint a trusted individual to make decisions on your behalf.
• Medicaid Planning: Early planning can help preserve assets while qualifying for Medicaid to cover long-term care expenses.

Final Thoughts

Estate planning in 2025 requires forward-thinking strategies and careful consideration of new developments. Whether navigating tax changes, securing digital assets, or planning for healthcare costs, taking proactive steps now can protect your legacy and provide peace of mind.

At Cannon Legal Firm, we’re here to help you adapt to these changes and create a comprehensive estate plan tailored to your unique needs. Contact us today to ensure your estate is prepared for 2025 and beyond.