Friday, August 28, 2020
You may be thinking, why are we already talking about Election Day? Well, as you know, time flies when you're having fun (or when you're in the midst of a pandemic) and the end of summer is quickly approaching. Therefore, it is important to consider the "intimate relationship between presidential politics, policy changes, and your estate planning.
As you likely remember, prior to the 2016 presidential election, possible changes to the tax code were highly anticipated as former presidential candidate Hillary Clinton was threatening to raise the estate tax to 65% and limit estate-tax exemptions. These threats drove many into changing their estate plans in order to protect their assets before the potential laws could be implemented.
In order to avoid the risk and stress associated with last-minute changes to your estate plan, it is a good idea to begin taking the necessary steps to get your affairs in order.
For high-net-worth individuals, you currently have the ability to gift up to $11.58 million to another person free of transfer tax. This 2020 exemption is more than double what it was in 2016. As of now, this exemption is expected to "sunset" in 2026, but given the volatility of politics, it could happen sooner.
Now is a perfect time to take advantage of the current laws in order to significantly reduce estate tax liability.
As there are a plethora of options and every family will need a plan tailored to fit their needs, you should consult with your estate planning attorney to ensure you take the proper steps when updating your estate plan.
See Alex Clendennen CFP, CWPA, Pre-Election Estate Planning Moves for High-Net-Worth Families, Kiplinger, August 16, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.