Editor’s note: The following post previously ran in the print editions of Ravellette Publications.

Last fall, we talked about how the estate exemption is sunsetting on Dec. 31. 2025.

If that’s not ringing any bells, the short version is that the amount of money in an estate that’s exempt from federal income tax will soon drop to around $7 million. That number might still seem high. But farmers and ranchers will have to consider how much their land is worth as part of their estate. With real estate values continuing to climb, getting to $7 million won’t be that hard.

The estate exemption is a small part of the current inheritance environment. In fact, by some estimates, about $84 trillion will get passed on in the U.S. by 2045. Some refer to the situation as the Great Wealth Transfer.

For this article, we’ll focus on those leaving wealth behind. Next month, we’ll talk about those who will inherit that wealth.

As we noted in the estate exemption article last fall, the topics of estates, inheritance, and final wishes aren’t always a good time. Facing your own mortality can be frightening. But if you don’t make a plan, the government will, and they don’t care much about your wishes. Making a plan gives you control and peace of mind, knowing your assets are going where you want them to.

So, if you’re passing assets on to your beneficiaries, there are a couple of first steps you’ll want to take.

First, find a financial professional you trust to help you develop a financial plan to transfer your wealth and assets. Doing so can help you understand the tax ramifications of your decisions and alert you to any unintended consequences you might not have considered.

A key part of that plan will be making sure you have legal documents in place — like a will or trust — that transfer your assets. Also, if you own assets in your name, e.g., your farm or ranch land, make sure you have a will or revocable trust that titles the assets in the name of the trust.

It’s also a good idea to make sure you have updated any designated beneficiaries on investment accounts or life insurance policies. Surprisingly, sometimes there are no beneficiaries listed, or the money goes to an unintended person, like an ex-spouse.

Don’t forget that you can download a free resource that can walk you through some of the other steps when it comes to end-of-life planning. Or call our office to have a hard copy mailed to you for free.

If you need help with estate planning and wealth transition, let us know.