A Balancing Act: Estate Planning & Simone Biles
If you are like our team, a new week rolls around, and we touch base on events that happened over the weekend. Recently the talk centered around the many talented athletes representing their countries at the 2024 Paris Olympics.
One athlete we talked about was Simone Biles – how does she do what she does? She is truly the GOAT (greatest of all time)!
Per the internet, Simone’s net worth combined with her husband, Jonathan Owens, is approximately $20M. Why are we talking about this? We want to use Simone Bile’s as our example for Estate Planning, which is the next stop on our journey into Q3 with clients.
Are You Prepared for an Estate Tax Sunset?
The federal estate tax threshold rose to $27.22 million in 2024 for married couples and $13.61 million for individuals as part of the Tax Cuts and Jobs Act (TCJA). Like several TCJA provisions, the higher estate tax limit is due to sunset in 2025. Barring congressional action, the exemption amount will return to about $6.8 million, adjusted for inflation, in 2026. Similarly, the current 40% maximum gift and estate tax rate will increase to 45%.1.2
For high-net-worth individuals, this could influence wealth transfer strategies. Although the potential sunset is coming, the good news is that it’s still a few years away.
For Simone and her husband, it pays for them to review their estate plan even though their current net worth is under the exemption amount. Future earnings for both, along with overall growth of their investments can rapidly push them above the exemption amount. If the federal estate tax threshold does sunset at the end of 2025, pre-game planning will pay off.
And there’s more good news: Waypoint can help you with your estate strategy, regardless of whether Congress decides to maintain the current threshold. As we head further into 2024, now may be an excellent time to get together and start thinking about your post-2025 strategy.
As always, please do not hesitate to reach out if you have questions about your situation, or anything else.
Sincerely,
Waypoint Capital Advisors
1. USBank.com, 2024
2. IRS.gov, 2024
