Tax strategies to help your clients

“Death and taxes may be inevitable, but they shouldn’t be related” - J.C Watts

Change is inevitable. When changes involve tax law, it is extremely important to meet with your clients to discuss any adjustments that may need to be made to their financial, retirement, or estate planning strategies.

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Sunsetting Tax Provisions

The sun may be setting on the planning opportunities that still exist today under the Tax Cuts and Jobs Act of 2017 (TCJA).

What you need to know:

Now is an opportune time to discuss with your clients their plans while the federal estate exemptions are still high and income tax brackets are lower.

View strategies that take advantage of these provisions before they expire.

What clients may be impacted:

Net worth of $5 million+
Plans to leave a legacy to loved ones
Desire to minimize taxes

View the potential growth of your client’s estate at $3M, $5M, and $8M.

Next Steps:

Review valuable estate planning opportunities
Review how income tax rate increase may impact your clients
Help clients take advantage of certain tax opportunities before 12/31/25

What's changing

The federal gift tax, state estate tax, and generation-skipping tax (GST) exclusion amount (exemption) are currently $13.6M per person. Absent any further congressional action, this TCJA provision will sunset, and the exemptions will revert to an estimated $7 million per person, equal to the pre-TCJA exemption amount of $5.49M ($11.8M for a married couple) increased by inflation through 2026.

The maximum estate tax rate will remain at 40%. If your client has an estate valued at $12M and dies in 2024, their estate is under the $13.61M exemption amount and they would not be subject to estate tax. If their estate is valued at $12M and they die in 2026, after the 2017 TCJA temporary exemption expires, they would owe approximately $2M in federal estate tax (based on an estimated $7M exemption amount). Do your clients’ estate have the liquidity needed to pay this tax? What strategies should they consider implementing implement now to reduce or eliminate their estate taxes?

What strategies can help mitigate risk?

Here are some strategy snapshots that can help address high tax payments, inflation, and market volatility.

Strategy Snapshot

Gifts of Income-Producing Property to ILITs to Pay Future Life Insurance Premiums.

Mother and son playing chess while grandfather looks on

With a large estate that contains varied assets, it’s important to consider the impact of the sunset of the TCJA. Now is the time to craft a tax-efficient strategy.

View Strategy

Strategy Snapshot

Discounted Gifts Enable ILIT to Pay Future Life Insurance Premiums.

There are tax changes on the horizon in 2026 that affect how gifting works. An irrevocable life insurance trust is one strategy that may make transfers more tax efficient.

View Strategy

Strategy Snapshot

Sizable Gifts Before the Sunset of TCJA May Enable an ILIT to Pay Future Life Insurance Premiums.

Family walking along the beach. Father and daughter in the foreground and other family in the background.

A growing estate that contains mixed assets could be a concern and it is important to understand the impact of the sunset of the TCJA tax relief.

View Strategy

Nothing is certain in life except for death and taxes

Life is full of uncertainties and tax laws are no exception. Irrespective of the 2025 TCJA expiration, the current tax laws will most likely change in the future. For example, the federal estate tax laws alone have averaged one change almost every decade for over 200 years.

For this reason, it’s important for clients to understand the impact of this tax change and to have a plan in place to proactively help protect the wealth they have built.

Do your clients think their estate is too small to worry about estate taxes?

What will your client's estate be worth in 5, 10, or 20 years at a mere 4% growth rate?

Year	Estate Value Growth $3 million	Estate Value Growth $5 million	Estate Value Growth $8 million
0	$3,000,000	$5,000,000	$8,000,000
5	$3,649,959	$6,083,265	$9,7,33,223
10	$4,440,733	$7,401,221	$11,841,954
20	$6,573,369	$10,995,616	$17,528,985

The question is…would your clients prefer to leave part, most or potentially all of their legacy to their family?

Tax implications can reduce the legacy your client leaves to their heirs.

Tax strategies to help minimize the impact of taxes (strategies):

Evaluate current assets; explore ways to diversify the taxation of their assets
Strategic gifting of highly appreciating assets to exclude from estate tax
Create trusts for a surviving spouse to avoid wasting state estate tax exemption amounts, lowering the size of the survivor’s taxable estate
Allocate generation-skipping tax exemption to transfers to skip persons, such as grandchildren
Ensuring the estate has access to cash to avoid sale of appreciating, illiquid, or cherished assets

The value of life insurance

Provide heirs with a death benefit that is generally income and estate tax-free (if structured properly)
Provide liquidity to help pay estate taxes
Ensure outstanding debts are paid
Manage probate costs
Protect against potential creditor debt

FOR FINANCIAL PROFESSIONALS. NOT FOR USE WITH THE PUBLIC.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its subsidiaries, employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.

Life insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual) and its subsidiaries, C.M. Life Insurance Company (C. M. Life) and MML Bay State Life Insurance Company (MML Bay State), Springfield, MA 01111-0001. C.M. Life and MML Bay State are non-admitted in New York.