At this point, no one knows exactly how or when changes to federal income tax, gift tax and/or estate tax will occur. What we do know now is that what has been proposed so far is likely not going to be the final product. So, stay tuned, but do not stop or delay your succession planning efforts. Instead, focus on your long-term vision and build flexibility into your plans to address a changing landscape. That was good advice before tax reform was proposed and remains good advice now.

Keep in mind that business and individual tax reform are much bigger priorities than estate tax reform – with a $5 million federal exemption, estimates place just 0.2 percent of estates subject to the tax. While a much higher percentage of estates that include ownership interests in family-owned businesses may be subject to federal estate tax, such estates remain a small minority of the general population. This means that accomplishing any change or repeal of the federal estate tax could be delayed or even sacrificed in order to allow other tax reform to occur.

Remember, too, that Washington’s estate tax applies to estates of just over $2,000,000 or greater AND that Washington’s top estate tax rate is the highest in the nation at 20 percent. Given the practical reality that the state estate tax is not going away and the uncertainty of any change to the federal estate tax, family-business owners must continue their succession planning efforts but include flexibility to accommodate a fluid tax landscape.