As 2016 draws to a close, many people in Georgia are thinking about end-of-the-year tax planning. Some people also think about estate planning at the year's end and whether to make annual gifts as a way to reduce the size of their estate. Currently, a single person can pass up to $5.45 million to their beneficiaries without incurring any federal estate tax.
Now that Donald Trump is the President-elect, there is a lot of anticipation about the tax reform that he proposed when he ran for president. In addition to lowering the corporate tax rate to 15 percent, Trump said that he would eliminate the federal estate tax entirely. For people who are looking for ways to reduce their estate taxes, Trump's plan could be the answer.
Estate tax has not been repealed yet, so people should still plan for the possibility that Trump's tax reform won't be implemented exactly as planned. However, estate planners may have more reasons to be optimistic with Trump in office. Hillary Clinton planned to cut the estate tax exemption for an individual from $5.45 million to $3.5 million. During Clinton's campaign, she also said that she would be raising estate tax rates to 65 percent for some people.
Estate tax laws are always changing, so it's a good idea for a person to regularly update their estate plan. If an individual has an estate that is valued above the federal estate tax exemption, estate planning is especially important. An attorney may be able to help an individual or couple to implement strategies that can help to reduce their estate tax burden and simplify the transfer of assets.