As we approach the new year, potential regulatory and legislative changes loom large, adding complexity to estate planning. A recent Think Advisor article, “7 Big Unknowns That Could Shake Up Retirement Planning,” highlights several key issues that may impact your financial future in 2025.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 and its successor, SECURE Act 2.0 in 2022, brought significant changes to retirement and estate planning. A potential third version of the SECURE Act is reportedly under discussion, though specifics remain unclear. Any new provisions could affect required minimum distributions (RMDs), retirement contributions, or other estate planning strategies, making it vital to stay informed.
The historically high estate tax exemption created by the 2017 Tax Cuts and Jobs Act (TCJA) remains a focal point of debate. While some predict an extension of these exemptions, the legislative path forward is uncertain, particularly given the potential for filibusters in the Senate. Estate planning strategies may need adjustments depending on whether these exemptions are extended or allowed to sunset.
Several developments in Social Security could affect estate planning:
To generate tax revenue, there may be increased emphasis on Roth accounts, where taxes are paid upfront. This shift could have implications for estate planning, as Roth accounts typically provide tax-free growth and distributions, benefiting long-term planning strategies.
A recent pause on new fiduciary rules under the Employee Retirement Income Security Act (ERISA) leaves future regulatory changes in limbo. These rules aim to reduce conflicts of interest among financial advisors, potentially impacting retirement account management.
Despite these uncertainties, estate planning remains an essential tool for protecting your family, managing tax liabilities, and ensuring your wishes are carried out. With potential changes on the horizon, reviewing and updating your estate plan in consultation with knowledgeable professionals is more important than ever.
At The Werner Law Firm, we monitor legislative and regulatory developments to ensure our clients’ estate plans stay ahead of changes. Our experienced team can help you navigate 2025's challenges and seize opportunities to secure your legacy.
If you have any questions, schedule a free appointment with us through our online appointment page.
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Reference: Think Advisor (Nov. 26, 2024) “7 Big Unknowns That Could Shake Up Retirement Planning”
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