The current tax system is crucial, especially for anyone thinking about passing on wealth to future generations. As the federal estate and gift tax exemption sunsets, people with potentially taxable estates and substantial gifts to their heirs face a looming deadline to maximize their estate planning strategies. The impending expiration of this tax benefit presents an opportunity to optimize wealth transfer and mitigate potential tax liabilities.
In this episode, Amy Arnett talks with Bret Riddle, Senior Advanced Design Analyst at Pacific Life. Bret works with life insurance and legal professionals specializing in estate planning, business succession, executive compensation, and retirement.
Amy and Bret discuss maximizing the federal estate tax exemption, current legislation, and how high-net-worth individuals can take advantage of temporary doubled exemptions before the Sunset Rule in 2026. They also explore advanced planning tools like spousal lifetime access trusts (SLAT) and the role of life insurance in wealth transfer.
In this episode:
- [01:29] - Bret's background and role at Pacific Life
- [02:14] - The federal estate tax exemption rule
- [03:47] - Tax-free wealth transfer
- [05:16] - The potential drawbacks of a double federal estate tax exemption
- [06:54] - SLAT (Spousal Lifetime Access Trust) explained
- [08:40] - How SLAT offers flexibility and control
- [11:14] - How life insurance can be used with a SLAT
- [15:47] - How to determine the right amount of life insurance
- [19:04] - Client groups that may be affected by the sunset of the estate tax
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