Tuesday, January 26, 2021
However, President Joe Biden has brought forth a new proposal which could lower the exemption before 2026. When conversation began about this new proposal, many people felt more comfortable because the rebalancing of the House and Senate appeared to be a long shot. However, now that the rebalancing has occurred, the proposal will likely have more support than originally believed.
"Policy commentators speculate on possible exemption amounts as high as $6 million and as low as $3 million, and even surmise that there could be an end to the unified credit, resulting in a $3.5 million exemption from estate tax and a $1 million exemption from gift tax. . ."
Another possible change will be elimination of the "step up" at death. There is also some speculation that the tax changes could be retroactive at the beginning of the year enacted.
It is important to know that, as of now, these projections are merely conjecture. However, it is important, and perhaps necessary, to consider how these changes may effect you or your clients estate plans.
See Keep Calm and Plan On: Estate & Gift Changes Ahead, Pierce Atwood L.L.P., January 20, 2021.