Mr. or Mrs. President? You Can Be Prepared for Either!
The upcoming presidential election dominates the news, and many of us are looking for details about the financial platform each candidate will enact. Some details about their views on the estate and gift tax laws have been revealed, and there are significant differences between the Republican and Democratic approaches. If you are lucky enough to have an ongoing relationship with your estate planning attorney, you may already be prepared to make the most of the changes and new opportunities that may arise. In our offices, we worry less about WHO will be our next President, and more about HOW we can help you manage any changes in the laws to achieve your desired outcomes.
Does Mr. Trump’s call to eliminate the estate and gift tax mean you no longer need estate planning? Not exactly. In our opinion, you still need a good estate plan and an estate planning lawyer who will make sure your plan does more than just reduce taxes. Planning should still proceed and should be structured to meet multiple goals. It is important to understand all of the reasons your estate plan is important. For instance, an irrevocable trust can provide important asset protection, shelter assets in the case of a divorce, and more. These types of non-tax goals mean your estate planning has merit regardless of Mr. Trump’s plan to repeal the estate tax.
Mrs. Clinton’s proposals currently include several key changes, including a significant decrease in the gift tax exemption to $1 million (from the current $5.45 million); lowering the estate tax exemption to $3.5 (from $5.45 million); eliminating the inflation adjustment on the estate tax exemption; and increasing the tax rate to 45%. These proposals bring to mind the 2012 estate planning environment when those who were unprepared faced worries about shifting assets to use a remaining gift tax exemption and whether the proper planning techniques were used for gifting. If your planning is up to date and you are in touch with your attorney, you will be ready to make gifts to appropriate spousal lifetime access trusts (if married) or to domestic asset protection trusts (if married or single) in the event you have not used all of your exemption. On the other hand, if you have used (or will use) all of your exemption, you will be ready to compare and consider options like a rolling GRAT before additional restrictions prevent using this technique.
No matter your political leanings, your ability to capture the opportunities that will arise under a new President will depend upon the relationship you have with your estate planning attorney. At Kling Law Offices, we work with our clients to insure they remain aware and informed of law changes that can be used to enhance an estate plan. We would welcome the opportunity to discuss your desires and options so you can plan for the peace of mind you deserve. Call our office today for your free initial consultation.
