Estate Tax Repeal?
by Richard S. Bernstein on Dec 22, 2017
By: Richard S. Bernstein, CEO & Randell C. Doane, Esq.
The last few weeks have been a wild ride for those who follow legislative proposals affecting the estate tax. There have been multiple plans to tinker with the arcane details of the estate and gift tax rules. This comment is being written on December 4th and we currently have a House bill that would increase the current exemption from estate tax to $10 million per person ($20 million per married couple) starting in 2018, and would repeal the estate tax entirely starting in 2024. We also have a Senate bill that increases the exemption to $10/$20 million, but does not totally repeal the estate tax. After years of debating the issue, it appears that the final legislation will be either the increased exemption amount or, perhaps, a phased eventual repeal.
Regardless of the outcome, we should keep in mind that any changes to the tax rules could be easily reversed by the next Congress. The Democrat party has a long-standing goal to reduce the exemption to $3.5 million. Since the time of the ancient Egyptians, most countries have had an estate tax in one form or another. The U.S. estate tax was on again/off again during the 1800s, and has been in effect continuously since 1917 (except for 2010 when it was temporarily repealed).
Whether Congress decides on an increased exemption or a complete repeal, we will not have a “free for all” when tens of millions can be easily transferred to children, grandchildren or other beneficiaries. That is because there is no intention to eliminate the gift tax, and that will continue to make it difficult to transfer significant wealth to the next generation. Regardless
Regardless of the outcome in Congress, the goals and techniques of well-conceived estate planning will remain unchanged. Wealthy individuals will continue to explore strategies to move wealth to the next generation without incurring a gift tax. Simply hoping that the increased exemption from estate tax will never be reduced or that the repealed estate tax will never be restored is probably not a good bet based on the history of the tax. Regardless of the final tax law, all individuals, wealthy or not, will continue to seek methods of transferring their estates to their intended beneficiaries in the most efficient and protected manner. All of the hubbub in Congress about revising the estate tax rules simply proves the old adage: “the more things change, the more they stay the same.”
Randell C. Doane, Esq. – is recognized as a specialist in tax law and is board certified in the law of wills, trusts and estates by the Florida Bar Board of Legal Specialization. Mr. Doane is an honored member of Martindale-Hubbell’s Registry of Preeminent Attorneys in tax law and estate planning. His law firm, Doane and Doane, PA, holds the highest rating (AV) from Martindale Hubbell which is the premier attorney rating service. Mr. Doane is frequently called as an expert consultant for estate and financial planning issues.