Southard Financial
Transaction Advisory

Estate Taxes Likely to Change Under the New Administration


What can you expect from Washington after January 20?

While no one can absolutely predict what changes the incoming Trump administration may propose to the federal tax code, Southard Financial wants to make you aware of potential changes that could significantly impact your estate planning.

Federal estate taxes will likely be revised or repealed.

There is little doubt that the code covering taxes on inheritance will be up for review, but the form of any proposed changes is unknown. Federal transfer taxes, carryover basis, the generation-skipping transfer (GST) tax, and the gift tax might all be revised or repealed. Further, new capital gains taxes could be imposed on gifts and estates.

Changes at the federal level will impact planning for state gift/estate taxes.

If you live in a state that imposes inheritance or gift taxes, it will be crucial to consult with an estate planning expert about any changes to the federal tax laws. Repeal of federal estate taxes could eliminate the use of qualified terminable interest property (QTIP) election and/or general power of appointment (GPO) trusts, making it harder to protect assets left to a surviving spouse. It is also unknown how states might respond to changes in the federal tax code. Some might repeal estate/gift taxes, while others might choose to impose new or additional taxes.

Protection of marital bequests will become more complicated.

The impact of a new estate/death capital gains tax on marital bequests is also uncertain. Some industry experts have opined that outright bequests, QTIP trusts (assuming the QTIP is not eliminated), and credit-shelter type trusts might be the best options for helping to defer capital gains taxes. Again, the best course of action is to begin a conversation with a qualified expert in the field who can advise you as things move forward.

Southard Financial is here for you.

While tax law changes to come may be hazy, you can nevertheless count on the very real and specific assistance provided by Southard Financial. We understand the impacts that changes in federal estate tax law could have on business valuation, and we offer the expertise to help you navigate the uncertain future when it comes to the value of business assets held in your estate.

To consult with an expert in business valuation or other area of concern, call us at (901) 761-7500 or use the form on our contact page.

To discuss possible changes in the tax code, or any other topic of interest, please comment on our Facebook page.

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