In January, Republican Donald Trump will become President and the Senate and House will convene with Republican majorities. How you update and manage your estate and financial plan under the Republican-controlled Congress and Presidency can make a significant difference in your tax burden and how your wealth accumulates.
Donald Trump has proposed across-the-board reforms in the tax codes. He promises to close some loopholes but lower taxes. The details of Trump’s tax plan are on his website. Key points include:
- Lowering income tax rates
- Significant increases to standard deductions
- Reducing the number of individual income tax brackets from seven to three
- Lowering the maximum tax rate from 39.6 percent to 33 percent
- Reducing the business tax rate from 35 percent to 15 percent
- Eliminating the estate tax
Note that any change to tax laws requires Congressional approval. We expect a significant amount of negotiation and compromise before any changes are finalized.
What To Expect
We are cautiously optimistic about the proposed tax changes. The elimination of the estate tax will benefit those with higher net worth but is likely to be opposed in Congress. Options include anything from a “sunset” provision to a gradual phase-in.
While you might see a benefit from reduced or eliminated estate taxes, we will still need to plan for who makes medical or financial decisions during incapacity, how to direct your financial legacy to your intended beneficiaries, how to protect your assets, and more. Unfortunately, Congress can’t legislate away lawsuits, wasteful spending by young beneficiaries, and other issues that can be overcome through proper planning. The good news is that we might soon be able to focus our time on just these issues instead of on reducing your tax burden.
With all the volatility surrounding this election cycle, we expect change. We are here to help you protect your estate. Call or email us to schedule a review of your will, trust, and estate plan so that we can take any actions needed to help protect and maximize your legacy.