Friday, October 30, 2020
As the presidential election draws closer, so does the threat to the historically high estate tax exemptions. Due to the Tax Cuts and Jobs Act (TCJA) the lifetime gift, estate, and generation-skipping tax exemptions doubled the exemption, raising it to $11.58 million (adjusted for inflation) in 2020. Which is the highest it has ever been.
Unfortunately, this high exemption will not last forever, and could be gone sooner rather than later. Therefore, it may be a good idea for you to take advantage of the exemption, or encourage clients to do so.
As of now, the exemption rates are not set to sunset until the beginning of 2026, but the exemptions could sunset much sooner, especially if Joe Biden is elected.
A few things you could do in preparation for the estate tax exemption sunset include:
- Consider Gifting Away Assets to Reduce Estate Taxes While You Still Can
- Take Advantage of Lower Valuations and Low Interest Rates
- Consider Acting Now to Avoid the Last-Minute Rush
See Chuck Cavanaugh, Federal Estate Tax Exemption Is Set to Expire – Are You Prepared?, Kiplinger, October 14, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.