'Delek US Holdings employees must remain proactive in updating their estate plans to reflect the evolving tax landscape, ensuring their financial legacy is preserved despite anticipated changes to exemption limits and estate tax regulations.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.
'Delek US Holdings employees should consider adjusting their estate plans now to take advantage of current exemption limits before the anticipated reductions in 2026, ensuring that their assets are protected and efficiently passed on to future generations.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.
In this article, we will discuss:
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Upcoming Changes to Estate Tax Exemptions — How the reduction of the federal gift and estate tax exemption in 2026 may impact Delek US Holdings employees' estate plans.
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Strategies for Managing Different Asset Types — The tax implications of retirement accounts, taxable accounts, and real estate when structuring an estate plan.
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The Role of Life Insurance in Estate Planning — How irrevocable life insurance trusts can help mitigate estate tax burdens and facilitate a smooth transfer of wealth.
Estate planning remains a complicated area of financial management for Delek US Holdings employees. With major changes to federal tax regulations expected by the end of 2025, employees should consider adjusting their estate plans to accommodate possible changes.
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Modifications to Exemption Limits' Effects.
At USD 13.99 million per person, the federal gift and estate tax lifetime exemption is currently USD 13.99 million. This exemption is expected to drop to around USD 7 million post-2025. This change creates concern among users of the existing higher gifting limits. But Treasury Department regulations from November 2019 say gifts made between 2018 and 2025 under the higher exemption amounts will not be affected even if the exemption amounts decrease after 2025. Source: Treasury Department:
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Considered Aspects for Different Account Types.
The federal estate tax affects all account types differently - and that includes employees of Delek US Holdings companies - because assets at death are taxable at the full market value. Assets in retirement accounts like traditional IRAs or 401(k)s are subject to income taxes and possible penalties if passed before death. Alternatively, assets in taxable accounts like real estate or brokerage accounts might be better suited to lifetime gifting strategies. Roth conversions may also improve tax efficiency on large assets in retirement accounts.
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Considerations Regarding Real Estate and Estate Taxes.
Estate planning for real estate involves considering the property's value at death because it directly affects estate tax, whether the heirs plan to sell or keep the property. States such as Nebraska and Pennsylvania tax the heirs on inheritances. Delek US Holdings employees planning their estates should structure plans that provide enough liquidity to cover estate taxes and other costs without having to liquidate large assets like real estate or family businesses, especially since estate tax exemptions could decrease in 2026.
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Life Insurance & Estate Planning.
Life insurance proceeds are included in the estate's gross value. But the proceeds of a policy owned by an irrevocable trust are not included in the estate and are exempt from estate taxes. This setup allows structured planning using annual exclusion gifts to fund life insurance premiums through trusts - a useful tool for tax-advantaged wealth transfer - especially with estates that may be over federal exemption limits.
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Reviewing Your Estate Plan
Delek US Holdings employees should review and update their estate plans every three to five years or at the time of a major life event like marriage, the birth of a child, or a significant change in net worth. State or federal tax laws also should cause an evaluation of estate plans. Some whose plans might not reflect new laws or personal circumstances should consult an estate planning attorney, especially with tax changes coming soon.
Final Thoughts
Delek US Holdings employees should take proactive estate planning steps to protect their legacy amid possible federal tax law changes. This means understanding how different asset types affect estate taxes, using trusts for life insurance, and maintaining estate liquidity to service tax obligations. Such strategies match financial planning to laws of today and tomorrow, preserving wealth for future generations.
Like navigating changing waters, Delek US Holdings employees should update their estate plans to reflect changing tax landscapes. Actively preserving financial legacies through lifetime gifting or asset restructuring may help them weather changes in federal tax exemptions. A bit like a captain in shifting seas, careful preparation may lead an estate to its destination.
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- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
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Source:
1. 'Understanding the 2026 Changes to the Estate, Gift, and Generation-Skipping Tax Exemptions.' Husch Blackwell , June 2024, www.huschblackwell.com .
2. 'Estate Planning Considerations for Highly Appreciated Assets.' McLane Middleton , September 2024, www.mclane.com .
3. 'Estate Planning Now and for the 2026 'Double Exemption' Sunset.' Eide Bailly , July 2023, www.eidebailly.com .
4. 'Make Estate Planning More Tax Efficient By NOT Splitting Assets Evenly.' Michael Kitces , August 2024, www.kitces.com .
5. 'Estate Tax Exemption Sunset 2026: Key Questions Answered.' Merrill Lynch Wealth Management , March 2024, pbig.ml.com.
What type of retirement plan does Delek US Holdings offer to its employees?
Delek US Holdings offers a 401(k) retirement savings plan to its employees.
How can employees of Delek US Holdings enroll in the 401(k) plan?
Employees of Delek US Holdings can enroll in the 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.
Does Delek US Holdings match employee contributions to the 401(k) plan?
Yes, Delek US Holdings provides a matching contribution to employee contributions made to the 401(k) plan, subject to certain limits.
What is the maximum contribution limit for the 401(k) plan at Delek US Holdings?
The maximum contribution limit for the 401(k) plan at Delek US Holdings follows the IRS guidelines, which can change annually. Employees should check the current limits each year.
Can employees of Delek US Holdings take loans against their 401(k) savings?
Yes, Delek US Holdings allows employees to take loans against their 401(k) savings, subject to the plan’s terms and conditions.
What investment options are available in the Delek US Holdings 401(k) plan?
The 401(k) plan at Delek US Holdings offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to diversify their portfolios.
How often can employees change their contribution amounts to the Delek US Holdings 401(k) plan?
Employees of Delek US Holdings can change their contribution amounts to the 401(k) plan on a quarterly basis, or as specified in the plan documents.
Is there a vesting schedule for the employer match in the Delek US Holdings 401(k) plan?
Yes, Delek US Holdings has a vesting schedule for the employer match, which determines how much of the matched contributions employees are entitled to based on their length of service.
What happens to the 401(k) plan if an employee leaves Delek US Holdings?
If an employee leaves Delek US Holdings, they have several options for their 401(k) savings, including rolling it over to another retirement account or cashing it out, subject to taxes and penalties.
Can employees of Delek US Holdings access their 401(k) funds while still employed?
Employees of Delek US Holdings may be able to access their 401(k) funds through hardship withdrawals, depending on the circumstances and the plan’s rules.
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