Now that we have a House, Senate and Presidency all in the hands of the Republican Party, what will that mean for you and your estate plan? President Elect Donald Trump has proposed several sweeping changes to the income and estate tax laws that could affect the way your present estate plan is drawn up.
As soon as the first or second quarter of 2017, we could see major reform made to the existing federal estate tax laws. Trump's proposal is to end the estate tax altogether, but replace it with a new tax regime. Instead of having an estate tax, he proposes to replace it with a capital gains tax at death. His proposal includes a $10,000,000 exemption from gain and assets beyond that subject to capital gains tax.
It is not clear however at this point whether or not assets beyond the exemption would be subject to gain immediately upon the owner's death even if the assets are not sold or if the trigger for capital gains would be due later when the assets are sold. What we do know at this point is that the Republican Party is in full support of abolishing the estate tax.
It is important to note however that even if the estate tax law is repealed by the current administration, this does not mean it will not later be revived. This means that careful planning should be undertaken with this in mind especially for mid to large sized estates.
If you have a trust with mandatory A/B provisions, it makes sense to have your trust reviewed to determine if this will have the best tax result for your family. Many estates for married couples with less than $10,900,000 have forced A/B provisions that will end up costing their children or other beneficiaries a lot in future capital gains taxes and they don't even know it.
If you are unsure as to what type of estate plan you currently have and would like a review, contact us at (760) 448-2220 or contact us on our contact page at https://www.geigerlawoffice.com/contact.cfm.