The Tax Cuts and Jobs Act (TCJA), passed in Donald Trump’s first administration, is set to sunset at the end of 2025, along with its breaks to estate taxes. Before November’s election, clients were advised to rush to appointments with estate planners.

Now the TCJA sunset is in doubt. Trump has said he will push to extend the provisions, and he has a GOP majority in the Senate and House to help him make that wish come true. 

What to tell clients?

“The election shifted tax priorities significantly. Where clients once felt urgency around gifting and estate strategies due to the TCJA sunset, there’s now some breathing room,” said Megan Slatter, wealth advisor at Crewe Advisors in Salt Lake City.

Mary Louden, Seattle-based director of estate planning at Brighton Jones, said many advisors gave advice last year with the assumption TCJA provisions would sunset because they didn't consider the possibility of the GOP sweeping the elections.

“Many advisors are revisiting what suggestions and recommendations to give clients for the end of 2024 and into 2025,” she said.

Ultra-high-net-worth families and individuals are continuing long-term tax planning, Louden said. “But, given the Republican victory, several are taking a breath in making final decisions on how much they are wanting to transfer to vehicles that may place assets outside their control (through irrevocable trusts, or otherwise) or that may otherwise impact their lifestyle,” she said.

“Clients are feeling a mix of relief and anticipation,” Loudon added. “Many were prepared to accelerate gifting and restructure estates in case the tax cuts [were] phased out, so there’s a sense of cautious optimism now. At the same time, clients are very aware that the rules could still change.”

Erik Preus, head of investment solutions at Envestnet PMC in Minneapolis, said end-of-year tax planning will be more important in 2025 than it is this year.

“We’ve known for some time that no meaningful changes in the tax code will happen in 2025 due to 2024 being an election [year] and the income tax provisions of the TCJA won’t expire until the end of 2025," he said. "This meant that regardless of the outcome of the election, tax policy would be front and center in our public debate in 2025. From a tax planning perspective, paying attention to that public debate and understanding where tax policy is heading will be important.”

Amy Sabin, wealth manager, Valiant Private Wealth at Steward Partners in Dallas said clients are relieved that a Trump win takes a tax on unrealized gains off the table.

“The most at-risk TCJA provision is the current estate tax exemption,” Sabin said. “Because this affects so few individuals ... it may be used as a bargaining piece in future legislation.”

Preus said the red sweep makes a TCJA renewal much more likely. "This gives President-elect Trump a stronger hand to push to renew the TCJA,” he said.

Louden added, “The possibility of the TCJA continuing or expanding is an opportunity for clients to pause and be reflective and thoughtful about any planning without coming down to the wire of making transfers for tax efficiencies by year-end."

Preus said that he’d especially watch the estate tax exemption and the $10,000 SALT cap on local tax deductions, which has a large impact on wealthy taxpayers from high-tax states. “The Democratic party will push hard to let the exemption fall back to 2017 levels,” he said.

“Just because Republicans control the executive branch and both houses of Congress doesn’t necessarily mean consensus will be easy," he said. "There are still some deficit hawks within the Republican caucus that will be concerned about the cost of renewing everything.”