Taxpayers and their advisors face an uncertain future due to volatile markets, the potential for recession still looming, and increasing interest rates. While this uncertain market presents challenges, it also creates certain wealth planning opportunities.

Beginning in January 2024, the gift, estate, and generation-skipping transfer (GST) tax exemptions will increase from $12,920,000 to $13,610,000 per person. These exemptions are scheduled to be cut in half at the end of 2025. Over the last year Applicable Federal Rates (AFRs) set by IRS and used in estate planning transactions, such as intrafamily loans, installment sales, Grantor Retained Annuity Trusts (GRATs), and Charitable Lead Annuity Trusts (CLATs), have significantly increased, making certain estate planning techniques less attractive. However, there are still good reasons to continue using these techniques. Conversely, transactions such as Qualified Personal Residency Trusts (QPRTs) and Charitable Remainder Trusts (CRTs) perform better in high interest rate economies, so now is a good time to revisit these as planning strategies.

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