Potential Estate Tax Changes Due to the 2020 Election
While the date of the 2020 election comes closer, estate planning lawyers are informing clients to anticipate the various changes to estate planning taxes that are likely to occur regardless of which candidate prevails. The following reviews some areas of estate planning that are likely to change following the 2020 Presidential election. Decreased Estate and Gift Tax Exemptions Even if it does not change due to a shift in political administrations, the existing estate and gift tax exemption of $11,580,000 will decrease in 2026 to the much lower amount of $5,000,000. This exemption could lower in 2021, however, as part of Democratic tax reforms. Similarly, the current generation-skipping tax exemptions are $11,580,000 and Vice President Biden has suggested that this amount could be lowered to $3,500,000 per individual. Increased Estate Tax Rates Since 2013, the estate tax has been 40%. Taxpayers who passed away in 2011 or 2012, however, utilized an estate tax rate of 35%. Not too long ago, in the early 2000s, the estate tax rate was between 45% to 55%. While the Democrat Presidential Nominee is likely to decrease the estate and gift tax exemption, it is also likely that additional tax reforms [...]