There is a strong possibility that 2021 will see significant changes to our tax laws. The Biden Administration and various Democratic legislators have proposed a variety of changes to our system of taxation for corporations and individuals. It is difficult to predict which of these proposals will be adopted or in what form, particularly with the slim majorities the Democratic party holds in the House and the Senate and the complexity of tax legislation. However, it is probable that some changes will be made. The purpose of this article is to summarize the possible changes to tax laws that impact estate planning clients and to recommend possible actions.
Some potential legislative changes are as follow:
Given the uncertainty of the tax laws, it is important to review your estate plan to ensure it carries out your intent in a tax-efficient manner. Some planning options to consider depending upon your circumstances:
It is important to periodically review your estate plan regardless of the legislative environment. However, in the current environment it is particularly important to make sure your plan maximizes the benefits of the tax laws.