Significant Changes Expected to Federal Estate Tax
President Joe Biden has promised many changes over the coming months, including an overhaul of current tax laws. As part of any new tax plan, it is likely that there will be significant changes to the federal estate tax.
As of today, any U.S. citizen can transfer up to $11.7 million at death (less any taxable gifts made during life) free of any federal estate tax.
On the campaign trail, then-candidate Biden proposed reducing the exemption amount from $11.7 million to $3.5 million and increasing the estate tax rate from 40% to 45%. The current consensus is that the federal estate tax exemption will decrease to anywhere between $3.5 million and $6 million under the Biden Administration.
Although it is very unlikely that any new legislation will be retroactive to January 1, 2021, some experts speculate that it could be retroactive or effective in the very near future.
Now is the time to consider whether you may be impacted by a reduction in the federal estate tax and plan accordingly. Attorneys in KMK’s Private Client Services Group are actively advising clients on various strategies to reduce estate tax exposure regardless of the amount of the reduction or the effective date of any new law.
If you’d like to discuss the estate tax, your current estate plan, or any other estate planning matters, please contact us.
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