The election of Donald Trump as president could affect estate planning in several ways. Here are some key areas where a Trump presidency might influence estate planning:
1. Estate Taxes: One of the most significant changes could come from the federal estate tax. Under the first Trump administration, there was a push to reduce or even eliminate the estate tax. In 2017, the Tax Cuts and Jobs Act doubled the estate tax exemption- the amount you can pass to heirs without incurring estate taxes- and it is set to revert to pre-2017 levels in 2026… unless new legislation is passed. A second Trump term, particularly with a friendly Senate and House, could result in making these changes permanent, or a push to reduce estate tax rates.
2. Capital Gains Taxes: Trump has also expressed opposition to raising capital gains taxes, which could impact yet another tax owed on assets sold after inheritance. Changes in capital gains tax policies could affect estate planning strategies that involve gifting appreciated assets or setting up trusts. If the Trump administration were to follow through on their promises, it could make strategies such as creating irrevocable trusts, making lifetime gifts, or using the generation-skipping transfer tax more attractive to those looking to transfer wealth efficiently while minimizing taxes.
3. Changes to Social Security or Medicare: Trump’s stance on Social Security and Medicare could influence estate planning for retirees or those approaching retirement age. Any major changes to these programs could impact income planning for beneficiaries, especially in the case of those relying on social safety nets in their retirement planning.
4. Financial Deregulation: Banking executives are expecting less regulation in a new Trump administration, which would make it easier for some individuals to complete complex estate plans without as much oversight or paperwork.
Ultimately, it is not just the wealthy who will need to consider how a second Trump term impacts their long-term goals and strategies. As suggested above, even those relying on social programs can expect an impact from the incoming administration’s change in policies.
While Trump’s policies could provide opportunities for tax savings and changes to estate planning strategies, individuals should work with a qualified estate planner or tax advisor to tailor their plans based on the most current tax laws and political landscape. Estate planning is highly personalized, and even small changes in policy can have a large impact on how assets are passed down.
Disclaimer: The information on this website is not legal advice. It is for information purposes only. No user of this site should act or refrain on the basis of this information without seeking legal counsel. This website does not create an attorney-client relationship.
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