Americans went to the polls back on November third to cast their votes for the president, senators, and house members. Not all the results have been finalized, but if you’re doing end-of-year tax planning for 2020, and beyond, you may have new tax implications to consider, including estate taxes.
Bottom line, higher net worth individuals could be in for a bumpy ride. That’s why the estate planning attorneys at Doane and Doane say you need to act right now to take advantage of current tax benefits before they disappear, perhaps as early as January of next year. The current estate tax exemption is just over 11 million dollars. That’s roughly double what it was in 2010. but the 11-million dollar exemption is scheduled to sunset in 2025 and revert to five million. If there is a change of party in the oval office and in congress, the sunsetting process could be accelerated, possibly reducing the exemption to as low as 3.5 million. We may also see higher estate and gift tax rates.
Election outcomes are only part of the story. The amount of money the government has had to pour into our covid decimated economy nearly ensures tax increases. All of this adds up to one certainty, high net worth folks should consider making substantial gifts before the end of the year. Either outright or in a trust.