Estate Planning Changes Coming in 2025: What You Need to Know

Estate planning is always evolving, and 2025 is no exception. Changes to federal estate tax laws, retirement account rules, and even the management of digital assets mean that a current estate plan could quickly become outdated. While a recent Dermatology Times article focused on doctors, the information applies to everyone planning for their future.

At the Werner Law Firm, we help you stay ahead of these changes so you can protect your legacy and your loved ones.

Will the High Federal Estate Tax Exemption End?

Right now, the federal estate tax exemption is $13.99 million per person. However, unless new laws are passed, this exemption will be cut in half starting January 1, 2026, dropping to around $7 million.

This means:

• You can currently gift or pass on nearly $14 million ($28 million for married couples) tax-free.
• After 2025, anything over about $7 million could be taxed at 40%.

Given this uncertainty, it’s wise to start planning now. One common strategy involves gifting appreciating assets to an irrevocable trust with family members as beneficiaries. This approach not only locks in today's high exemption but can also offer valuable creditor protection for your heirs.

Inherited Retirement Accounts and New Required Minimum Distributions

If you inherited an IRA before 2020, you're exempt from recent rule changes.
However, if you inherit an IRA after 2020, new Required Minimum Distribution (RMD) rules could apply starting January 1, 2025.

Key points:

• Non-exempt beneficiaries must fully withdraw the account within 10 years of the original owner's death.
• If the deceased had already begun taking RMDs, annual distributions are also required by the beneficiary.
• Spouses, minor children, beneficiaries less than 10 years younger than the original owner, and those who are disabled or chronically ill may qualify for exceptions.

Failing to meet the RMD rules can result in steep IRS penalties, making proper planning essential.

Local Estate and Inheritance Taxes

In addition to federal taxes, many states impose their own estate and inheritance taxes:

• Estate taxes are paid by the estate before assets are distributed.
• Inheritance taxes are paid by the heir, depending on their relationship to the deceased.

Some states have both, others have neither. Understanding your local laws—and how they interact with federal taxes—is critical to crafting a smart estate plan.

Estate Planning for Cryptocurrency and Digital Assets

As cryptocurrency ownership becomes more common, it’s important to address these assets in your estate plan. Managing digital wealth requires specialized knowledge.

We recommend:

• Naming a digital executor familiar with digital wallets, NFTs, and online security.
• Providing clear instructions and access keys in a secure but accessible format.

Without proper planning, digital assets can easily be lost or mismanaged after death.

Start Planning Now—Don’t Wait Until 2026

Waiting until late 2025 to review or revise your estate plan could leave you without enough time to properly protect your assets. Proactive planning now ensures that you and your family won’t be caught off guard by upcoming changes.

At the Werner Law Firm, we stay ahead of changing estate laws so you can feel confident about your future. Whether you’re concerned about the 2026 estate tax changes, inherited retirement accounts, or protecting your digital assets, our experienced estate planning attorneys in Los Angeles are here to guide you.

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

Reference: Dermatology Times (March 21, 2026) “Anticipated Changes in Estate Planning for 2025 What Dermatologists Need to Know”