Estate Planning Update: Federal Estate Tax No More?
Introduction – Estate Planning Today
For years, the primary goal of estate planning attorneys was minimizing or eliminating estate taxes at both the federal and state level. In 2010, the state of Oklahoma abolished its estate tax. Now, the federal government may do the same. That’s according to a blueprint that the Trump Administration and key Congressional committees released today. It’s called the Unified Framework for Fixing Our Broken Tax Code.
How Would the Unified Framework Impact Estate Planning?
The proposal would eliminate the federal estate and generation-skipping transfer taxes, which in 2017 apply to estates valued at greater than $5.49 million. What does that mean for you? If enacted into law, individuals would be able to pass unlimited sums of money to their heirs tax-free. Although relatively few Americans pay federal estate taxes, this would nevertheless represent a significant shift in the focus of estate planning. Rather than worrying about taxes, estate planning attorneys and their clients could concentrate on avoiding probate and protecting heirs from creditors and lawsuits. What’s more, clients with complex estate plans might have an opportunity to simplify their documents.
Conclusion – Estate Planning Attorneys and Clients Stay Tuned
It remains to be seen whether there’s enough support in Congress for this plan. However, given the ramifications of such a major change to our tax laws, estate planning attorneys and their clients should closely monitor the proposal’s progress.