Potential Tax Law Changes That May Impact Estate Planning

In our most recent issue of On Course, we addressed the benefits of estate planning — both for the benefit of near-term tax planning for yourself, as well as for the benefit of your beneficiaries down the road.

Part of the reason for the timing of that article concerned the change-over in White House administrations and the possibility of new tax laws that could significantly impact estate and tax planning – particularly for high-net-worth individuals and families. The chart below – used with permission from DuBois, Bryant & Campbell, LLC – outlines the potential tax law changes driven by two Senate bills recently introduced, and a couple of proposals from Biden’s administration that would offset increases in income and capital gains taxes due to the more favorable estate planning laws that currently exist.

The two bills are known as: 1) “For the 99.5% Act” (introduced March 25, 2021), and 2) the “Sensible Taxation and Equity Promotion (STEP) Act” (introduced March 29, 2021). At the moment, both bills are proposals and may or may not come to fruition. If they do pass, the potential impacts are as follows:

Chart information provided courtesy of DuBois, Bryant & Campbell, LLC.

As is always the case, your financial situation is unique and any changes you consider based on the above information should be thoroughly discussed with an estate attorney, CPA, or your financial planner.

*As of June 25, 2021, no deals regarding these proposals had been struck.