It has come to our attention recently that trust and estate planning activity has picked up dramatically in recent months. I refer you to our blog dated August 20th of this year for a link to information provided by First Trust regarding the historic perspective on Presidential election results. This upcoming election is particularly interesting because the nation is emerging from an era where capital gains tax rates have been relatively low while the estate tax exemption limit has been historically high. Popular theory suggests if President Trump is re-elected we might not expect material changes to these thresholds. On the other hand, if Joe Biden takes over he has already signaled the changes he would like to implement. These are the potential changes causing the estate planning attorneys to burn the midnight oil.
In a recent conversation with Stephen Butler, a prominent tax attorney with Miller, Butler, Schneider, Pawlik & Rozzell, PLLC in Rogers, Arkansas, he said, “My emails and texts are off the charts with clients seriously making year end plans centered around this election.”
Some of our clients are setting up meetings with attorneys like Mr. Butler to make certain their trusts are in order. In the event Biden wins, they may consider adding additional assets or recognizing gains before the end of the 2020 tax year to make certain they are not subject to potential higher taxes in future years.
Steve pointed out two items in the Biden tax plan that are causing clients to ask for meetings:
A 39.6% capital gains rates for incomes over $1,000,000.
The elimination of the step-up basis at death (probably the single largest thing because it applies to taxable and non-taxable estates as rolled out as a plan).
He provided the following link which goes in to more detail:
In over 35 years I’ve never had a client ask me to refer them to a lousy CPA or estate lawyer because they want to pay more tax. Stephen Butler is one of the good guys! Call us and we will give you an introduction.