Estate planning and the election: Potential impact of each candidate
Estate planning is a process that allows property owners to take advantage of various rules and regulations to help better ensure that they can get the most out of their assets. These rules and regulations are impacted by various changes in laws, changes that can happen at any time.
One event that could impact estate planning strategies is the upcoming election. A specific example of an area that could be impacted are gift and estate taxes.
Thus far, as noted in a recent publication by the National Law Review, each candidate appears to take opposing views on how these taxes should be handled.
How would the Democratic candidate handle the gift and estate tax?
The Democratic candidate has noted that she would reduce the limitations set on the amount of property a person can pass at his or her death without paying a tax. This rate is currently set at $5.45 million for each individual or about $10.9 for each married couple.
The proposal provided by this candidate would reduce this by almost two million to $3.5 million. That means anything over this amount would be taxed when transferred. This may still seem like a large amount, but keep in mind this includes all assets that make up your estate. Some examples include the value of your home, vehicles, retirement accounts, and any life insurance policies.
How would the Republican candidate handle the gift and estate tax?
At this time, the Republican candidate has stated that he would eliminate the estate and gift tax completely. This would potentially allow for transfers without the implication of a federal tax. State taxes may still likely apply.