For those individuals and families planning their financial legacy, December 31st, 2025, is an important date to keep in mind when thinking about taking advantage of unprecedented transfer and gifting opportunities under the current tax environment. While taxation should never be the only reason to transfer assets or make major gifts, December 31st 2025 currently sits as the time to get the most out life insurance decisions within estate planning.
1. Identify and then engage your trusted advisors (legal, tax, trust, financial and insurance)
Don’t wait. If the anticipated tax changes happen, the lines will be long and the time will be short to discuss, decide, draft and implement all that will need to be done by December 31, 2025.
2. Review your current legal documents and insurance portfolio.
How has your situation changed and what legal documents need to be updated? From ownership and beneficiary designations to policy performance, when is the last time you had your insurance portfolio reviewed? Are there reasons to consider 1035 exchanges, ownership situations and life settlements?
3. Start the Process
Life Insurance can be underwritten without an obligation to buy. This allows you to know where you stand in terms of pricing and available capacity, specifically for you.
•Assess ownership and beneficiary status
•Review your current portfolio
•Complete the medical portion of the underwriting process (medical records and possibly an insurance exam)
Have a general understanding of certain succession and estate planning techniques.
•Annual Exclusion Gifts – are you using these to your fullest?
•Sale to a defective trust
•Spousal gift trusts
•Irrevocable Life Insurance Trusts
Questions to consider:
•Will you need a 3rd party valuation? If yes, who will complete the appraisal and how much time will that take?
•How will a significantly lower federal estate tax exemption impact your planning and tax liability?
•How will a change in the capital gains rate affect you?
• How does a potential change in the “step up in basis” treatment of assets affect your need for liquidity?
If you have questions or would like more information, please contact us, we look forward to your call.
Mark joined Rose Street in 2017 and helps clients with their estate, business succession, and family/business planning through the use of life insurance products.
He loves golf, skiing, hiking, and reading. Fun fact: Mark has both played and coached tennis at the collegiate level.
This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. To determine what is appropriate for you, please contact your Rose Street Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed.
Securities and Investment Advisory: Services offered through M Holdings Securities, Inc., A Registered Broker/Dealer and Investment Advisor, member FINRA/SIPC. Rose Street Advisors is independently owned and operated. Rose Street Advisors is a member firm of M Financial Group. #5797855.1