Introduction
Donald Trump’s 2025 tax proposal includes substantial changes to the federal estate and gift tax system, designed to preserve generational wealth and ease the transfer of assets between family members. These revisions could raise exemption limits, simplify planning, and reduce the tax burden on heirs but only for those who act in time.
This blog explores the key changes to the estate tax law, relevant IRC references, strategic planning tools, and IRS compliance steps for high-net-worth individuals and families.
Key Estate & Gift Tax Provisions (IRC References)
- IRC §2010(c) – Increase in the Unified Credit exemption amount
- IRC §2505 – Adjustment to the Lifetime Gift Tax Exemption
- IRC §2031 – Valuation rules for estate assets
- IRC §2631 – Generation-Skipping Transfer (GST) tax exemption increases
- IRC §6018 – Filing requirement threshold may be raised for Form 706 (Estate Tax Return)
Summary of Proposed Estate Tax Changes
| Provision | 2024 Rule | Proposed 2025 Rule |
|---|---|---|
| Estate Tax Exemption | $13.61 million/person | $20 million/person |
| Gift Tax Exemption | $13.61 million lifetime | Combined with above |
| Estate Tax Rate | 40% flat rate | Potential phase-down for smaller estates |
| GST Exemption | Matches estate exemption | Increased to match proposed $20M |
Note: Final numbers may vary depending on Congress.
IRS Forms to Be Used
- Form 706 – United States Estate (and Generation-Skipping Transfer) Tax Return
- Form 709 – United States Gift (and GST) Tax Return
- Form 8971 – Information Regarding Beneficiaries Acquiring Property from a Decedent
Example Scenario
Case: Ramesh, a U.S. citizen with $28M in total assets
Current 2024 Rules:
- Estate over $13.61M is taxable
- Estate tax due on ~$14.39M × 40% = $5.76M
Under 2025 Proposal:
- Exemption increases to $20M
- Taxable estate drops to $8M
- Estate tax due: ~$3.2M
Net savings for heirs: $2.56M
Step-by-Step Estate Planning Compliance Guide
- Update Your Estate Plan – Meet with a CPA and estate attorney to realign strategies with new limits.
- Utilize the Full Gift Tax Exemption – Gift up to the new threshold during your lifetime to reduce your estate.
- Use a GST-Exempt Trust – Lock in exemption for future generations.
- Track Asset Valuations – Use qualified appraisers to meet §2031 requirements.
- File Form 709 Annually – Report all gifts made above the annual exclusion limit.
- Prepare Form 706 for Large Estates – Even if no tax is due, filing may be required to elect portability.
Conclusion
The estate tax changes in Trump’s 2025 proposal could dramatically reshape how wealth is preserved and transferred. High-net-worth families who act before these rules change again can potentially save millions. Timely planning is key to taking full advantage of these provisions.
Call to Action
Are your estate plans aligned with the latest exemption thresholds?
Trump’s 2025 tax bill may provide a rare opportunity to reduce or eliminate estate taxes but only if you structure your estate properly and document your asset transfers accurately.
Secure your legacy plan your estate now:
Book a meeting with Anshul Goyal, CPA, EA, FCA
About Our CPA
Anshul Goyal, CPA, EA, FCA, is a U.S.-licensed Certified Public Accountant, Enrolled Agent, and estate tax advisor. He works with U.S. citizens, green card holders, and Indian residents managing large U.S. estates and foreign inheritance issues. His team specializes in strategic estate and trust tax compliance.
Disclaimer
This blog is for informational purposes only and does not constitute legal or financial advice. Estate planning involves complex legal and tax rules. Please consult with your CPA and estate attorney before making changes to your plan.