Regardless of where you are on the political spectrum, the fact remains that it has been an exciting campaign. Now that President Trump has taken office, there are some clear indicators that estate planning may change under his administration. Here are some high level takeaways:
- Repeal of the Death Tax: President Trump’s campaign website made clear his intention to “repeal the death tax, but capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms.” If this is borne out, then there will be a great impact on the wealthy. There may also be a repeal of the gift tax.
- Capital Gains: President Trump also made clear that he intends to retain the current 20% capital gains rate. The impact of this is that for large estates, there may be a reduction in the total tax paid, in relation to the size of the estate.
- Anti-Abuse Provision: Trump’s plan also puts into place prohibitions on transfers of appreciated assets to closely held family charities. This likely means that there will be strong incentives to keep taxable estates within the family, usually via various trust vehicles.
To be fair, there are still lot of unknowns. That said, in order to fully understand the impact under the current law, it is important to seek out counsel to determine how best to help you plan your estate transition!