On September 13, the House Ways and Means Committee released a proposed plan to pay for the $3.5 trillion Build Back Better Act (the “Act”). The proposed legislation contains a variety of changes across the tax code, but the following summary focuses on the proposed provisions that most directly impact estate tax planning.

Reduction of the Estate Tax Basic Exclusion Amount -

The current estate tax basic exclusion amount is $11,700,000 for 2021. The proposal would decrease the estate tax basic exclusion amount to $5,000,000, indexed for inflation (accelerating a reduction that is set to occur in 2026). Under this proposal, the basic exclusion amount in 2022 is anticipated to be $6,020,000.