2025 Estate Tax Sunset and Its Impact on Georgia Businesses
June 30, 2025
The upcoming 2025 Estate Tax Sunset is a pivotal moment for business owners, investors, and families across Georgia. This significant change in federal tax law will reshape how estates are taxed, potentially creating opportunities and challenges alike. Understanding what’s ahead and preparing accordingly is vital for safeguarding your business assets and long-term financial goals.
What Is the 2025 Estate Tax Sunset?
The federal estate tax parameters currently in place were established as part of the 2017 Tax Cuts and Jobs Act. This law doubled the estate tax exemption limits, allowing individuals to shield up to $12.92 million (or $25.84 million for married couples) from estate taxes in 2023. However, these provisions are set to expire at the end of 2025, reverting the exemption back to pre-2017 levels of approximately $5.49 million per individual (adjusted for inflation).
This dramatic reduction in the exemption threshold will mean more estates will become subject to federal estate taxes, creating new financial considerations for families and businesses alike.
How Will Georgia Businesses Be Affected?
Implications for Business Owners
Many family-owned businesses and small enterprises could see increased exposure to estate taxes after the sunset. Owners may need to reassess how their business assets fit within the lower exemption limits, particularly if their business is valued above those thresholds. Planning strategies will be critical for ensuring smooth transitions and minimizing tax liabilities.
Impact on Real Estate Investors
Real estate investments, a significant asset class for many Georgians, may face heightened scrutiny under the reduced exemptions. Investors with large property portfolios will need to explore ways to manage potential tax burdens, such as creating trusts or leveraging other estate planning tools.
Considerations for Families
Families counting on wealth transfers to future generations could experience unanticipated tax consequences. This calls for proactive conversations around how to best preserve wealth and maintain financial stability for your heirs.
Actionable Steps to Prepare
With less than two years until the tax sunset change, proactive estate planning is the best way to protect your assets and adjust for the upcoming regulatory shift. Here are four steps Georgia business owners and families can take now to prepare for the changes ahead:
Reassess Your Estate Plan
If your estate plan was created under the current exemption levels, now is the time to revisit it. Work with a financial advisor or estate planning attorney to evaluate how your assets align with the anticipated exemption thresholds in 2025.
Consider Gifting Strategies
One effective way to minimize estate taxes is by using the current high exemptions to make tax-free transfers to family members or trusts. By making strategic gifts before the sunset, you can significantly reduce the taxable value of your estate.
Explore Business Succession Options
For business owners, succession planning is key. Establishing a clear strategy, such as transferring ownership gradually or setting up a family trust, can protect your company from future tax burdens and ensure a smooth transition.
Take Advantage of Trusts and Other Tools
Tools like irrevocable trusts, family limited partnerships, or charitable foundations can help reduce the taxable value of your estate while providing long-term benefits to your family and the causes you care about.
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