Those in the estate-planning industry remain in the dark about President Trump’s intentions regarding tax reform. It’s likely that his policies will benefit the wealthiest citizens, as he repeatedly stated while campaigning for president that he planned to get rid of the “death tax.”
That misnomer is actually called the American Taxpayer Relief Act, which passed in 2013 and extended the indexed individual exemption of $5 million for individuals and $10 million for couples. At present, it is $5.45 million, affecting just a small percent of Americans. It generates revenues of approximately $20 billion per year.
What the proposed estate tax repeal will mean remains uncertain at this time. One possible complication is that Trump suggested instituting a capital gains tax on estates. He said there would be at least a $10 million exemption so farmers and small business owners would not be affected.
Most estate planning attorneys and financial advisors are urging clients with high-net-worths to sit tight and see how things develop before altering their estate plans.
As long as wills are current, legal and medical powers of attorney have been drafted and guardianships for minor children are in place, it’s probably best to ride out this period of uncertainty before making any rash changes to your estate plan right now.
However, if there is a personal sense of urgency for your circumstances, your estate planning attorney can review all of your options and recommend the best choice based on your needs. Often the best choice will be a simple trust that addresses the need for control while providing protection and management of valuable assets.
Source: CNBC, “Estate-planning pros take wait-and-see approach to Trump,” Andrew Osterland, Jan. 11, 2017
