Anytime there’s a big election on the horizon, there’s the possibility that the estate tax landscape can change. It’s a big reason why plenty of our clients maintain a relationship with us over many years so our office can keep an eye on these details and let you know when you need to make changes to your existing plans.
Right now, the federal lifetime estate and gift tax exemption is $11.58 million for each person, which doubles for a married couple. That is set to stay in place until the end of 2025, at which point it decreases significantly to $5.49 million per person. Economic circumstances, however, have been hit really hard due to the pandemic in 2020. This means that reductions in lifetime exemption amounts could drop much sooner- like 2021- regardless of Congressional control or who wins the election.
The world has been turned upside down, so we’ve all got to brace for the possibility that big changes could be coming in the estate planning arena.
I’m sure you’re thinking, “Thanks for the bad news. So what do I do instead?”
Set up a consultation with my office to discuss where your current plans are at and what you can do before the end of the year to maximize your situation. One key idea that some families might consider is taking advantage of this higher exemption amount while it still exists. If you are a high net worth family, you might need to gift assets up to your remaining lifetime exemption amounts before the end of 2020.
If you’re not sure what adjustments you need to make or if you have questions about your strategy, contact my office to learn more about getting an individual session to review your existing estate plans and discuss other options.