07.20.2020

Estate Tax Planning Alert

We have had many questions this past year over the current estate planning laws and the potential changes that may be implemented if the Democrats end up in control of the Presidency, House and Senate. If that happens, a simple majority in Congress could increase taxes without the threat of a filibuster (in fact, only 50 votes in the Senate plus the vote of the Vice President could do this.)  Also, there would be no limitation on passing a law later in 2021 and making it effective 1/1/2021. Changes that could be made are:

  1. Lowering the lifetime exemption per person from $11.5 million to $3.5 million.
  2. Possibly increasing the estate and gift tax rate from 40% to a higher percentage, especially for much larger estates.
  3. Possibly eliminating the “step-up in basis” at death on assets that have potential capital gains.
  4. Possibly eliminating estate tax minimization techniques. This would make planning in the future more difficult.

If you believe there is a significant chance of control by the Democrats as a result of the election and project to have a taxable estate under the potential new rules, there is likely planning you can do that will reduce potential estate taxes for the future. However, you will have to act very soon if you want to complete your planning before 2021 when new laws could take effect.

Please contact a Katz Teller attorney to discuss these potential outcomes:

Bob Brant - rbrant@katzteller.com - (513) 977-3405
Bill Russo - wrusso@katzteller.com - (513) 977-3479
Jody Brant - jsbrant@katzteller.com - (513) 977-3473
Whitney Maxson - wmaxson@katzteller.com - (513) 977-3462
Maggie Gibson - mgibson@katzteller.com - (513) 977-3410

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