By Steven J. Oshins, Esq., AEP (Distinguished)
When the clock strikes midnight the evening of December 31, 2025, the federal estate and gift exemption will drop in half and many wealthy people will kick themselves for failing to make their gifts and use their gift tax exemption in time. That is, assuming the incoming President and Congress don’t extend the current laws before they expire.
What is FOMO?
“FOMO” is the fear of missing out. Many wealthy people fear missing out on their large gifting prior to the end of end of 2025. If the federal estate and gift tax exemption drop in half and they missed this golden opportunity, they will live with regret.
Year 2025: History will Repeat Itself
The FOMO phenomenon will help fuel the panic that we will no doubt see throughout 2025 as the supply and demand ratio tilts more and more in favor of the estate planning attorneys as the year goes on.
How do I know this? Let’s look back at previous FOMO years.
2012: In 2012, we witnessed a panic like never seen before as the wealthy people rushed to make their gifts before the so-called fiscal cliff as President Obama looked to allow the exemption to drop back down to $1 million at the end of the year.
2020: In 2020, we witnessed a panic over the possibility of Joseph Biden being elected President which theoretically would mean a drop in the federal estate and gift tax exemption. As we all know, he was elected, but then there was no change in the exemption because the Democrats couldn’t agree on a new tax act. The panic caused by the possibility of him being elected resulted in a large number of people panicking to use their gift tax exemption.
2021: In 2021, the Democrats worked on a tax act that most people expected to include a large reduction in the federal estate and gift tax exemption. This was essentially just a continuation of the fear and panic from 2020. It was almost certainly a great year for all estate planning attorneys who create irrevocable gift trusts since the demand outweighed the supply of attorneys like what happened in 2012 and 2020.
2025: History will repeat itself. There are already a lot of people making their gifts because of the FOMO. The number of current and prospective clients inquiring about using their unused gift tax exemption will only grow as we get closer to the end of 2025.
Summary
The estate planning industry will be rockin’ and rolling at least through the end of 2025 given the FOMO that will almost certainly create a panic that has not been seen previously other than in certain years such as 2012, 2020 and 2021. Those estate planning attorneys who were in practice during those years know what I am talking about.
Make sure you’re fully staffed and that your attorneys know how to create and fund completed gift trusts. They must be prepared for a tsunami of client work as the wealthy clients and prospective clients will continue to want and need more and more work as the year progresses.
Develop a plan regarding when and how to stop taking new clients to assure those who have retained you that you can get their work done by year-end. Be very strict with them to make sure they understand that if they don’t cooperate quickly to finish their plan, then you may have to put theirs on hold so other clients who have retained you are able to make their gifts in time.
RELATED EDUCATION
If you found this article interesting, you might also be interested in these other educational programs and products about this topic.
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- 2024 Year-End Tax Planning
- Planning Now for the 2026 Cliff
ABOUT THE AUTHOR
Steven J. Oshins, Esq., AEP (Distinguished) is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. He was inducted into the NAEPC Estate Planning Hall of Fame® in 2011. He was named one of the 24 “Elite Estate Planning Attorneys” and the “Top Estate Planning Attorney of 2018” by The Wealth Advisor and one of the Top 100 Attorneys in Worth. He is listed in The Best Lawyers in America® which also named him Las Vegas Trusts and Estates/Tax Law Lawyer of the Year in 2012, 2015, 2016, 2018, 2020, 2022 and 2024. He was named the “Estate Planning GOAT (Greatest Of All-Time)” by an internet poll conducted by the Ultimate Estate Planner in March of 2024. He can be reached at 702-341-6000, ext. 2 or soshins@oshins.com. His law firm’s website is www.oshins.com