Wall Street Journal, Rich Americans Prep Fail-Safe Estate Plans Ahead of Election:
With the presidential race in a dead heat, rich Americans are calling estate lawyers.
The wealthy want to know if they should take steps to protect their fortunes from higher estate taxes. Should a change under the 2017 tax cuts expire as scheduled after 2025—considered more likely with Vice President Kamala Harris in the White House and Democrats gaining the majority in Congress—the minimum wealth subject to the estate tax would be halved to roughly $7 million per person.
At that level, nearly 9,000 estates would owe estate tax in 2026, according to the Urban-Brookings Tax Policy Center. That is compared with roughly 4,000 estates estimated to owe the tax in 2025.
Whether it pays to draft a fail-safe estate plan for tax policies that haven’t been decided is up for debate.
Financial advisers and wealth managers say that the cost of hiring them is justified for many families. By making large lifetime gifts and setting up certain types of trusts for spouses or children, people can remove millions from the balance subject to the estate tax.
Those advisers also say the window for people to make such tax-saving moves is shrinking—and that it pays to do the work ahead of time if you are considering a trust.
But there are costs and risks of putting money into trusts unnecessarily, including capital-gains taxes that wouldn’t apply to an outright inheritance.
There is also no guarantee the moves are even warranted for those under the higher estate tax thresholds. Though some Democrats in Congress favor an estate-tax overhaul that would go beyond just letting the Trump cuts expire, Harris herself hasn’t staked out a position. Her campaign didn’t respond to requests for comment. …
Unmarried individuals worth at least $7 million, and married couples worth $14 million and up, should talk about the estate tax, estate lawyers said. The discussion includes how old you are and what assets you own. …
There is also a big risk to acting before the government finalizes a plan.
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