2024 Estate Planning Trends: What You Need to Know

As we move into 2024, estate planning continues to evolve with new legislative changes, tax considerations, and planning strategies. Understanding these trends is crucial for protecting your assets and ensuring your legacy is preserved according to your wishes.

Key Legislative Changes

The landscape of estate planning has been significantly impacted by recent legislative developments. The current federal estate tax exemption remains historically high at $12.92 million per individual for 2023, with adjustments for inflation expected in 2024. However, this exemption is scheduled to sunset in 2026, potentially dropping to approximately $6 million per person.

States continue to adjust their own estate and inheritance tax thresholds. Several states have recently increased their exemption amounts or eliminated estate taxes entirely, while others have introduced new wealth transfer taxes targeting high-net-worth individuals.

Digital Asset Planning

One of the most significant trends in estate planning is the increasing focus on digital assets. From cryptocurrency holdings to online business accounts, digital assets require special consideration in estate plans. Key considerations include:

• Access Management: Ensuring executors can access digital accounts and assets
• Cryptocurrency Planning: Proper documentation of wallet addresses and private keys
• Social Media Accounts: Determining how online presence should be managed after death
• Digital Business Assets: Transferring ownership of online businesses and intellectual property

Trust Strategies for 2024

Trusts remain a cornerstone of sophisticated estate planning. Several trust strategies are gaining prominence:

Spousal Lifetime Access Trusts (SLATs)

With the potential reduction in estate tax exemptions, many couples are establishing SLATs to lock in current exemption amounts while maintaining indirect access to trust assets through their spouse.

Charitable Remainder Trusts (CRTs)

Rising interest rates have made CRTs more attractive, offering enhanced income streams to beneficiaries while providing charitable deductions and estate tax benefits.

Dynasty Trusts

Multi-generational planning through dynasty trusts continues to grow in popularity, particularly in states that have eliminated or extended the rule against perpetuities.

Family Limited Partnerships

Family Limited Partnerships (FLPs) and Limited Liability Companies (LLCs) remain valuable tools for estate planning, offering:

• Asset protection from creditors
• Centralized management of family assets
• Valuation discounts for gift and estate tax purposes
• Flexibility in succession planning

Planning for Incapacity

Estate planning increasingly emphasizes lifetime planning for potential incapacity. Essential documents include:

• Revocable Living Trusts: Avoiding probate and providing for seamless management during incapacity
• Durable Powers of Attorney: Ensuring financial decisions can be made if you become incapacitated
• Healthcare Directives: Documenting medical treatment preferences and appointing healthcare proxies

International Estate Planning

With increasing global mobility, international estate planning considerations are becoming more common. Key issues include:

• Tax treaty implications for cross-border estates
• Foreign account reporting requirements
• Coordination of estate plans across multiple jurisdictions
• Pre-immigration planning for incoming residents

Action Steps for 2024

To ensure your estate plan remains current and effective:

1. Review Existing Documents: Ensure your will, trusts, and other documents reflect your current wishes and circumstances
2. Update Beneficiary Designations: Review and update beneficiaries on retirement accounts, life insurance, and other assets
3. Consider Tax Planning Opportunities: Evaluate strategies to minimize estate and gift taxes
4. Address Digital Assets: Create an inventory and access plan for digital assets
5. Consult with Professionals: Work with experienced estate planning attorneys and tax advisors