Transferring wealth & wisdom from generation to generation
Edward E. Wollman, JD, LL.M
Patrick Courville, J.D.
Permanent §199A Deduction: The 20% pass-through deduction for business owners (LLCs, S-corps, partnerships) is now permanent rather than expiring in 2025. Entity Structure Impact: These changes may make C corporations more attractive than S corporations for certain business planning situations. WHAT THIS MEANS FOR FLORIDA ESTATE PLANNING The focus has moved from minimizing estate taxes (due to higher exemptions) to maximizing income tax benefits and creating meaningful wealth transfer, including the pure joy of giving to causes you care about. Trust structures, business entity selection, timing strategies, and charitable planning all require fresh analysis and consideration. Florida residents have particular advantages due to our favorable state tax environment, which amplifies the benefits of these federal changes. NEXT STEPS We recommend reviewing your current estate plan and business structures in light of these changes. The strategies that made sense under prior law may not be optimal going forward, and new opportunities may be available. If you would like to discuss how these changes affect your estate plan, please get in touch with our office to schedule a consultation.
lack of a limitation on gifting allows for creative advanced income tax shifting. Multiple Trust Strategy: Families can create separate trusts for different beneficiaries to multiply certain tax benefits. For example, using multiple trusts can greatly increase the SALT deduction compared to the $40,000 limit for a single trust. Nongrantor Trusts: Now that the exemption is “permanently” higher, these structures offer opportunities for income shifting, enhanced deductions, and tax-efficient wealth transfer. Essentially, we will establish irrevocable trusts, where the beneficiaries will pay income tax in a lower tax bracket. Previously, grantor trusts were favored because they allowed the grantor to pay the income tax instead of the trust beneficiaries, reducing their total gross estate. CHARITABLE PLANNING OPPORTUNITIES QCD Strategy: Qualified Charitable Distributions remain excellent for those over 70½—direct IRA-to-charity transfers up to $100,000 annually avoid income tax entirely (Currently indexed to $108,000 for 2025). Charitable Lead Trusts: These offer significant hidden income tax benefits, especially for families who do not itemize deductions every year. Charitable Remainder Trusts (CRTs): These strategies are increasingly attractive and will only improve over time. Consider starting with a small contribution. The CRT benefits can extend to both you and your heirs. Bunching Strategy: For taxpayers who do not itemize annually, bunching charitable contributions every few years continues to make sense. Additionally, non-itemizers can now deduct up to $1,000 (single) or $2,000 (married) in charitable contributions annually. Roth Conversions Gain Popularity: Based on the continued lower income tax rates, the higher estate tax exemption, and the lack of certainty of future administration changes, the Roth conversion has renewed benefits. BUSINESS OWNER CHANGES Enhanced QSBS Benefits: Qualified Small Business Stock exemption increases from $10 million to $15 million per person. The required holding period for partial benefits is reduced from 5 years to 3-4 years.
Visit www.probate-florida.com to read more about this subject and other estate planning matters.
Ed Wollman is a Florida Bar Board Certified Attorney specializing in wills, trusts, and estates with over 35 years of experience practicing in the state of Florida.
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