This week, Vice President Kamala Harris endorsed tax hikes aimed at creating nearly $5 trillion in tax increases over the next decade. If enacted, this legislation would dramatically transform the estate tax landscape as we know it. That is, estate planning and wealth transfer strategies would be curtailed, the number of estates subject to federal estate tax would expand, and estate tax exposure for high net worth individuals would dramatically increase.
The tax increases supported by Harris may include:
Reduction of the lifetime federal estate tax exemption to $3.5 million (from its current level of $13.61 million).
Imposition of new estate tax rates of 55%, 60%, and 65%.
Elimination of stepped-up basis at death.
Application of a new 10% surtax to estates in excess of $1 billion.
Requirements that GRATs have a 10-year minimum term and a remainder interest of at least 10% of the transferred assets.
Restrictions on the use of grantor trusts.
Limitations on the use of valuation discounts for family-controlled businesses and other assets.
Caps on the foreign tax credit for estates and trusts.
These proposed estate tax changes supported by Harris would have far-reaching consequences for estate planning and generational wealth transfer, if passed.
Now is the time to attend to your estate planning, before it’s too late. Please contact us for assistance.
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