John Mateyko, APMA®, WMCP™, RICP® on Estate Planning Trends in 2024

With 2024 in full swing, I am reaching out today with some key estate planning considerations for the year ahead. I encourage you to take a look below and do not hesitate to reach out with any questions.

Tax Changes in 2026

As you may know, the current tax exemption amount of $13.61 million is scheduled to revert to its previous $5 million threshold in 2026 (likely adjusted for inflation to $7 million). The Biden Administration has proposed further lowering the current lifetime estate and gift tax exemption amount to $3.5 million and increasing the estate tax rate from 40 to 45%.

Under current law, if someone’s estate is valued at $10 million at time of death, there would be no federal tax owed since the estate falls below the $13.61 million exception. However, this same person would likely owe taxes on $3 million of the $10 million estate if the current exemption level is sunsetted in 2026 as expected, with the $3 million taxed at 40% (or 45% if the Biden Administration’s proposal becomes law).

Depending on your goals and current financial situation, strategic planning before the exemption reduction can help maximize the current higher exemption levels, as demonstrated in the example above. Below, I’ve outlined just a few strategies to consider before 2026:

 Spousal Lifetime Access Trust (SLAT): This irrevocable trust allows one spouse to transfer wealth to the other while excluding future

appreciation from estate taxes. The beneficiary spouse retains limited access to the assets, offering flexibility. However, the donor spouse cannot benefit directly from the assets in the SLAT and must have sufficient other assets for their needs. It’s important for the donor spouse to have enough funds outside of the SLAT to meet all of their financial obligations and needs.

 Credit Shelter Trust (CST): Upon the death of one spouse, a portion of their assets goes into this trust and is passed to beneficiaries after the surviving spouse’s death. The trust shields the assets from estate taxes upon the second spouse’s death. A possible downside is the potential for higher income taxes for beneficiaries, as assets in the trust receive only one step-up in basis. As a result, when beneficiaries sell these assets, they might face higher capital gains taxes due to the increased difference between the asset’s original basis and its sale price.

 Permanent Life Insurance: This type of insurance provides lifetime coverage as long as premiums are paid. Unlike term life insurance, which covers a specific period, permanent insurance not only assures a death benefit but also builds cash value over time. Policy owners can borrow against this cash value or make direct withdrawals to cover various expenses like medical bills or education costs. Including permanent life insurance in an estate plan can be beneficial as life insurance proceeds are usually exempt from estate taxes. It provides liquidity for paying any estate taxes or compensating for wealth lost to taxes. This strategy is particularly relevant for estates that might exceed the potential new exemption amount in future years due to appreciation.

Especially given the potential changes, it’s crucial to regularly review and update your estate plan to ensure it aligns with the current laws and your personal goals.

This material is intended for informational purposes only, and is not intended to provide tax advice. Please consult your tax advisor for tax advice for your specific situation.

About John Mateyko

John Mateyko is an experienced financial advisor with an exceptional career spanning over two decades. Residing in the picturesque town of Serenbe, GA, John holds the position of Managing Partner at IDEX Financial, a company he established in 2010. His primary focus is to develop sustainable retirement income plans, applying his wealth of experience and expertise to attempt to aid clients in reaching their financial objectives.

John’s foray into finance took flight upon completing his business studies at Augustana College. This academic background set the stage for a prosperous career, during which he occupied key roles at esteemed firms such as Morgan Stanley, Atlas Securities, US Bank, and JP Morgan Chase. Throughout his professional journey, John Mateyko has consistently received accolades for his outstanding portfolio management skills.

John’s unwavering commitment to excellence is evidenced by his numerous prestigious certifications. As a Fiduciary Financial Planner, he is dedicated to prioritizing his clients’ needs. His certifications as a Wealth Management Certified Professional (WMCP), Retirement Income Certified Professional (RICP), and Accredited Portfolio Management Advisor (APMA) underscore his extensive knowledge and continued dedication to learning. Currently studying for the Certified Investment Management Analyst (CIMA) through the esteemed Yale School of Management, John Mateyko demonstrates his steadfast commitment to professional development.

About IDEX Financial

Founded as a boutique investment house in 2010 in Chicago, Illinois; IDEX Financial expanded to the Atlanta, Georgia market in 2018, and moved to Serenbe, Georgia in 2020. At IDEX John’s role involves steering clients through the intricacies of retirement planning. Acknowledging the unique financial situations of each client, he adopts a customized approach to devise strategies that aim to align with their specific requirements. Striving to provide insightful advice and cultivate a sense of security, John’s ultimate goal is to empower his clients to make informed decisions about their financial futures.

Outside his professional remit, John values his family and community deeply. Together with his wife, son, and cherished family dog, he is proud to be part of the Serenbe community. Situated in rural Georgia, Serenbe is a haven that promotes wellness, community, and nature, offering abundant scenic trails for residents and visitors to enjoy the natural beauty it presents.

To conclude, John Mateyko is not merely a successful financial advisor but also a devoted family man and an esteemed member of the Serenbe community. Through his expertise, dedication to ongoing education, and tailored approach, John is committed to positively influencing the lives of his clients and the community he considers home.