Beat the 2026 Tax Cliff: Founders Must Act Now on Estate Planning
The current historically high federal estate and gift tax exemption (approximately $12.9 million per person in 2023, and over $13 million by 2025 due to inflation) is set to sunset at the end of 2025, potentially dropping to around $6–7 million in 2026. This impending “tax cliff” means unicorn founders and newly wealthy execs have a closing window to transfer wealth under favorable conditions. The post will highlight a “use it or lose it” urgency: if you don’t utilize the full exemption now with lifetime gifts, you can’t retain that higher exemption once it decreases.
Key strategies for 2025:
Making large tax-free gifts to family or trusts while the higher limits apply, funding advanced vehicles like Dynasty Trusts or Spousal Lifetime Access Trusts (SLATs) to lock in today’s exemption, and other moves (such as charitable trusts) that reduce a taxable estate.
2025 may be a once-in-a-generation opportunity to shield tens of millions from estate tax – founders should start planning with your advisors immediately before the law changes.
