What Does a Trump Presidential Victory Mean to My Estate Plan and Estate Taxes?
Regardless whether you lean towards the political left or right, the results of the 2016 Presidential and Congressional elections will result in changes to our current estate and gift tax laws.
Since 2013, when the last major estate and gift tax laws were enacted, we have been in a season of estate tax stability. The top estate tax rate is at 40%, a unified credit is at $5 million, which adjusts annually for inflation yearly (in 2017 it is slated to increase to $5.49 million) and spousal portability.
Many feel that with President Trump in the White House and a Republican controlled House and Senate, a full repeal of the estate or “death” tax may be in our near future.
Be aware however that if an estate tax repeal happens, it is likely that we will also be introduced to a new capital gains tax on inherited assets above a certain threshold. This threshold will most likely only affect the wealthy who hold capital gains at death worth over $10 million.
Regardless of when any changes take place, and what those changes are and whether they affect you, it is vital to stay on top of your estate plan. Although these new possible tax laws may not affect you, it may be the ideal time to review your estate plan and make sure the roles and responsibility you have allocated to others after you are gone are still viable solutions to your personal family planning.
It is important for those who have a revocable living trust to make sure that your funding (or the ownership of asset in your trust) is up to date. There are many well-meaning families that have estate plans with revocable living trusts destined to fail at death due to lack of funding.
The bottom line is that changes in tax laws, state laws, family associations and assets are inevitable. It is important to periodically review your estate plan, or start today to prepare an estate plan that will meet the needs and goals of your family if something were to happen to you.
If you have any questions regarding family based estate planning or any other legal issues, please do not hesitate to call the attorneys at Rowley Chapman & Barney, Ltd. Call today at (480) 833-1113.