As the election results rolled in, many people were left asking: Will things change? People are writing volumes about all the possible side-effects of a Trump election. Let me focus on one little area – your estate plan.
President-Elect Trump’s tax plan (http://bit.ly/2ehhZ4q) – among other changes – eliminates “death taxes”. Presumably, this means that the estate tax, generation-skipping transfer tax, and gift tax will be eliminated. This will have an effect on estate planning.
In order to adjust for the loss of tax revenue from eliminating “death taxes”, President-Elect Trump has proposed a “capital gains trigger” at death. Estates would be taxed on the increase in value of property owned at death. This plan includes a very high exclusion amount – $10,000,000.00 – in order to help make sure that family farms and small business are not unduly burdened.
The likelihood that such a plan is put in place seems to be quite high. Trump’s proposals closely align with House Speaker Paul Ryan’s plan (http://bit.ly/2a1gReI).
So, what does this mean for you?
Not a whole lot.
“Death taxes” were effectively eliminated for 99.8% of Americans by President Bush (43) in the early 2000s when the exclusion amounts were set so high as to only effect the ultra-wealthy. Illinois imposes its own death tax and has a lower exclusion amount, but still only effects the very wealth. Wisconsin imposes no separate death tax.
It remains a fact that for 99.8% of people estate planning means much more than concern about taxes. An estate plan will help manage affairs during periods of incapacity. It will nominate individuals to make medical and financial decisions. An estate plan will ease administration and can address conflict points early. It will make sure that your assets are cared for and distributed as you intend.
Putting a plan in place early will help to ensure that your heirs are only blessed by your legacy.