The recent political changes in our government have resulted in great uncertainty in our federal estate, gift and income tax laws. At this time, it is unclear as to what changes will be made in our tax laws, and if such changes will be short-term or permanent. A substantial benefit to most clients, even of modest financial worth, has been the “step-up” in cost basis that occurs under existing law for assets passing at death and which determines the amount of capital gains or losses upon the future transfer or sale of an asset. This rule that has been in existence for our lifetimes is under serious consideration for repeal by our current federal government. Almost certain to be changed is the amount of value that can be transferred during life or death without gift or estate tax. Changes that are made to our estate, gift and income tax laws, in all probability, will be re-evaluated after the next federal election in November of 2022. Accordingly, you should consider implementing an estate plan that addresses the potential tax law changes but that also weighs the risk of making irrevocable gifts or transfers that may be revealed as unnecessary in the future and counterproductive to the clients’ estate planning objectives.
Most individuals will be best served by delaying major changes in their estate plans. However, some people will need to proceed now with their estate planning based upon the currently available information. As Board-Certified specialists and with former experience in the Internal Revenue Service, we are committed to maintaining current knowledge of existing tax proposals and the likelihood that they will be enacted. Call our office today to schedule a consultation to discuss your estate plan.