
As we prepare for the transition to the Trump administration in January 2025, businesses and individuals should be strategically planning for significant policy shifts that will affect estate planning, banking, taxation, and agricultural interests. Here are several key areas requiring your immediate attention.
Preparing for Tax and Estate Law Shifts in 2025
The most pressing consideration for estate planning is the future of the Tax Cuts and Jobs Act (TCJA). Currently, the basic exclusion amount for gift, estate, and generation-skipping tax stands at $13,610,000 per person. Without congressional action, this exemption will sunset on December 31, 2025, reverting to approximately $7,000,000 (adjusted for inflation).
While the Trump administration is expected to prioritize extending the TCJA's provisions, including the increased exemption amount, this process will likely extend beyond the first 100 days. High-net-worth individuals should consider taking advantage of the current exemption amounts while they remain certain. The administration has signaled potential additional changes, including a possible reduction in the estate tax rate from 40% to 20% and modifications to corporate tax structures.
The timing of these changes remains uncertain. Although Republicans control both chambers of Congress, they lack the 60 votes needed in the Senate to avoid filibuster on non-budgetary matters. However, they are expected to use the budget reconciliation process to extend key TCJA provisions, requiring only a simple majority vote.
Navigating Deregulation and Opportunities in Banking
The banking sector can expect swift deregulatory action in the first 100 days of the administration. While existing regulations won't disappear overnight, the administration can quickly rescind informal agency guidance, including advisory opinions and policy statements. This creates immediate opportunities for deregulatory action that could benefit financial institutions.
Financial institutions facing regulatory scrutiny may find both opportunities and challenges in this transition period. The new administration is likely to review or pause ongoing investigations, potentially allowing companies to negotiate favorable resolutions before the transition is complete. However, past conduct remains subject to enforcement due to existing staff recommendations and long statutes of limitations.
We anticipate a particularly favorable environment for bank mergers and acquisitions. The administration's focus on reducing inflation and lowering interest rates should improve bank earnings and valuations through increased net interest margins and higher valuations for bond portfolios. These factors have already contributed to a recent rally in bank stocks.
Agriculture in Focus: Opportunities and Challenges Ahead
The agricultural sector faces a complex landscape of both opportunities and challenges under the new administration. On the tax front, the expected extension of favorable TCJA provisions and potential restoration of immediate research and development expensing could benefit agricultural businesses. However, significant concerns exist regarding trade policy and labor availability.
The administration's proposed universal baseline tariffs of 10-20% on imports, coupled with a potential 60% tariff on Chinese imports, could dramatically impact agricultural markets. During Trump's first term, similar policies led to retaliatory tariffs that severely affected U.S. agricultural exports, particularly to China. The administration's stance on trade could trigger similar responses this time, potentially disrupting established export markets and supply chains.
Labor issues present another critical concern for agricultural operations. The administration has pledged aggressive immigration enforcement actions, which could affect agricultural labor availability. The H-2A visa program, which provides legal temporary agricultural workers, may face additional scrutiny or restrictions. Sectors heavily dependent on immigrant labor, such as dairy, meat processing, and produce, should prepare for potential workforce disruptions.
Your 2025 Strategy: Key Recommendations for Success
Given these anticipated changes, businesses and individuals should begin preparing now for the shifting landscape. In estate planning, clients should review their current plans and consider accelerating gifting strategies while exemption amounts remain certain. Business succession plans may need adjustment to account for the new tax landscape.
Banking and financial services clients should assess opportunities under the reduced regulatory framework while maintaining robust compliance programs, particularly at the state level where enforcement may intensify. The favorable M&A environment warrants careful evaluation of strategic opportunities.
Agricultural operations should conduct thorough supply chain analyses to assess potential tariff impacts and review their labor force structure and visa compliance. Additionally, businesses should evaluate how potential trade policy changes might affect their export markets and consider diversifying their international partnerships.
What’s Next: Preparing for the Road AheadÂ
While many changes will require congressional action beyond the first 100 days, businesses and individuals should begin preparing now for this shifting landscape. Our firm continues to monitor these developments closely and stands ready to assist clients in navigating these changes effectively.
Contact our estate planning, banking, or agricultural law teams to discuss how these changes may affect your specific situation and to develop appropriate strategies for your business or estate plan.