Wealthy families should consider taking advantage of the favorable estate planning environment that 2024 brings. Next year, the estate, gift, and generation-skipping transfer tax exemptions, which are adjusted annually for inflation, will be $13.61 million per person. This new exemption amount represents a $690,000 increase over 2023 — offering opportunities for additional wealth transfers even for those who have made significant prior gifts. However, this favorable planning environment is temporary — especially because this new exemption amount is scheduled to be cut in half at the end of 2025.

Additionally, effective January 1, 2024, the Corporate Transparency Act (“CTA”) imposes new reporting requirements for many corporations, partnerships, and LLCs. Entities with reporting obligations include not only operating businesses but even single-member LLCs that simply hold a vacation home or rental property. While there are limited exceptions to the reporting obligations, such as for tax-exempt entities and certain large operating companies, many entities will be required to file or face civil and even criminal penalties. Importantly, the CTA requires companies and their owners to report certain information to the Financial Crimes Enforcement Network (“FinCEN”).