Georgia residents may have heard about Donald Trump’s plan to repeal the federal estate tax. While he may end up cutting some taxes, it is important not to base an estate plan on the president-elect’s campaign statements. Individuals who are planning their estates should not assume that federal estate taxes are going away just yet.
While there is a lot of speculation about what Trump will do to reform estate tax laws, no one actually knows what will happen yet. On Trump’s website, one sentence is written about his estate tax plan. The sentence is: ‘The Trump plan will repeal the death tax.” There is no mention of a possible repeal of the federal gift tax, and the exact meaning of ‘death tax” is up for debate.
Even if Trump was absolutely clear about his goals for estate tax reform, he may not be able to affect the changes that he wants to see. Tax policy is not in the hands of the White House alone, and changes are mostly controlled by Congress. The House Republicans did release a proposed plan on tax reform that mentioned a repeal of the estate tax, but the plan did not mention a gift tax repeal.
Some families use financial trusts as a way to shield valuable assets from taxation. Trusts are still a valuable estate planning tool even if there is tax reform that lowers or eliminates federal estate taxes. An estate tax planning attorney may be able to talk to a family about the various types of trusts and help the family to determine how to use trusts to protect and grow their wealth.