A LinkedIn post from Cornerstone Financing highlights shifting dynamics in U.S. estate taxation under the OBBBA, which raises the federal estate tax exemption to $15 million per individual. The post suggests that, while federal estate tax exposure has diminished for many households, state-level estate taxes remain a material concern in certain jurisdictions.
Meet Samuel – Your Personal Investing Prophet
- Start a conversation with TipRanks’ trusted, data-backed investment intelligence
- Ask Samuel about stocks, your portfolio, or the market and get instant, personalized insights in seconds
According to the post, 13 states plus Washington, D.C. still impose estate taxes at thresholds significantly below the federal level, with Oregon starting at $1 million and Massachusetts at $2 million, not indexed for inflation. New York is cited with a $7.35 million threshold and a “cliff” provision that can subject the entire estate to tax once it exceeds the limit by 5%.
The post notes that long-term homeowners in high-cost markets may be accumulating taxable estates primarily through home price appreciation, potentially without sufficient liquidity to meet future estate obligations. This framing points to a growing planning gap where illiquid wealth, often concentrated in real estate, collides with relatively low state estate tax thresholds.
As described in the post, some advisors are exploring proactive use of home equity via alternative funding structures to address this issue. These structures are indicated as potential sources of liquidity to fund planning instruments such as life insurance held in irrevocable life insurance trusts, hybrid long-term care products, and income annuities that can provide cash when estate taxes fall due.
For investors, the content suggests a durable advisory and product opportunity in advanced estate planning, particularly in high-cost, high-tax states. It may imply ongoing demand for complex insurance solutions, specialized lending against home equity, and advisory services that integrate tax, real estate, and retirement planning.
The reference to work by SPG’s Chief Advanced Markets Officer indicates alignment with broader industry thinking on leveraging home equity as a planning tool. For Cornerstone Financing, positioning around alternative funding structures could support growth in fee-based planning, cross-selling of financing products, and potential partnerships with insurers and wealth managers focused on affluent homeowners.