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How Will the Political Landscape Impact Your Estate Plan?

Many planners and individuals did not anticipate the sea of changes that occurred with the recent election. These changes could bring about a new round of income and estate tax changes. We have previously highlighted some potential changes including a wealth tax based upon a person’s net worth, reductions in Federal and State estate tax credits and exclusions, income tax increases for the upper middle class, and increases of state and local real estate, income and sales taxes.

The current Federal Estate Tax Exclusion is over $11 million per person but there are proposals to reduce it to as low as $3 million. In addition, there are initiatives suggesting eliminating planning opportunities including business valuation discounts, grantor retained annuity trusts, asset freezes, and intentionally defective trusts.

Some have waited to see how the elections played out before re-examining their estate plans and particularly their current Wills and Trusts. Others may already be in the process of reviewing their plans. Tax legislative changes can impact how your assets will pass when you die. Many documents express how assets will pass to surviving spouses and children by reference to the estate tax credit and exclusion. If the credit or exclusion changes, this may impact the individual beneficiaries differently.

We recommend that individuals consider a review of their current plans to guide against potential changes that could irrevocably harm their tax planning objectives, disrupt their beneficiary dispositive plan, and cost the family unnecessary expense. No one can anticipate all possible changes, but strategic planning my go a long way toward protecting your family wealth.

Contact our Trust & Estate Planning experts today to learn more.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute an accountant-client relationship.