This concept is particularly important in tax planning during volatility in the market, she added.
Individuals subject to wealth transfer taxes should engage in gift planning as soon as possible, she said. “If the laws change in 2026 as scheduled, the IRS will be powerless to approach individuals who took advantage of pre-2026 gifting laws to require payment of the difference in tax,” Flaum said.
“While it is possible that there may be legislation introduced to lessen that reduction, there are just as many legislative proposals out there to accelerate the timing of the sunset,” said Theresa de Leon, executive vice president and national director of sales at Arden Trust Company in Dallas. “The end result will likely be somewhere between. Most people believe the exemption will be reduced and are not eager to try to guess where it will end up.”
A few years ago, the Treasury also made clear that there would be no clawback of taxable gifts into the estate should the exemption amount later revert to $6 million—what de Leon termed “effectively freezing the value of the asset for tax purposes and allowing future appreciation to pass to younger generations without additional transfer taxes.”