An Estate Planning Opportunity for Owners of Companies Impacted by Recent Events

March 6, 2025 – The recent efforts by the Department of Government Efficiency (DOGE), new tariffs going into effect, and the looming March 14th deadline to avoid a U.S. government shutdown have significantly impacted companies operating in certain segments of the market.  For the owners of those companies feeling the brunt of these recent developments, there’s an opportunity to take advantage of the historically high lifetime estate tax exemption amounts while the valuations of their companies are temporarily depressed.

Effective January 1, 2025, the lifetime estate tax exemption amount increased to $13.99 million for individuals and to $27.98 million for married couples.  These exemption amounts are the highest they’ve ever been, however, under current law, on January 1, 2026, the amounts are scheduled to be cut in half.

Since the GOP holds a majority in both the House and the Senate, there’s a strong possibility the current tax provisions will be extended beyond 2025.  However, given the cacophony of recent events and next week’s impending deadline to avoid a government shutdown, continued uncertainty is likely.

If legislative action is not taken by Congress, the reduction in the lifetime estate tax exemption would mean that individuals with estates exceeding the thresholds would incur significant estate tax liabilities and reduce the amount of assets they can pass on to their heirs.

Therefore, given these potential changes, time is of the essence to begin estate planning.  Estate and gift advisors typically suggest setting up trusts and gifting assets to the trusts to minimize estate tax liabilities in the future.  For owners of privately held companies, gifting equity to a trust is almost always advised.  And for owners of companies impacted by the recent developments in the market, it’s a rare opportunity to take advantage of the temporarily depressed valuations to shield even more equity under the historically high lifetime exemption amounts.

The McLean Group can provide you with an independent, IRS-compliant valuation to support your estate planning needs.  The McLean Group’s dedicated valuation advisory services practice is one of the largest and most respected valuation practices in the Mid-Atlantic region.  Please contact us to discuss how we can best support your objectives.

Contact Ryan Berry (rberry@mcleanllc.com) or Scott Sievers (ssievers@mcleanllc.com) today to discuss this or other valuation topics and services that can help you and your firm achieve your missions and goals.

About The McLean Group

For over 30 years, The McLean Group has been providing investment banking and financial services offerings focused on the Defense, Government & Intelligence (DGI), Security, Critical Infrastructure, Maritime, Facility Services, Unmanned Systems, and Public Safety markets. Our 60+ professionals bring deep industry experience and relentless execution to every client engagement. We provide solutions that blend financial creativity with operational expertise. Whether we are providing transaction advisory, valuation opinions, or growth capital, our services are unmatched in these core markets. Learn more at www.McLeanLLC.com.