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Guess What Might Be Back?!

The government may be trying to get their hands into your and your loved ones’ pockets again – – and in a VERY BIG way!

I am not going to predict which political party will win the November election and control the Presidency, Senate, and House. But I do need to let you know what may happen if Democrats wind up winning all three, which appears more and more likely according to the polls. (I’m not taking a political stand here, just stating facts, so please don’t shoot the messenger!)

Democrats and mainstream media have raised significant issues about the wealth and income inequality in our country. One solution for this inequality, now being expressed more vocally, is a major overhaul of the federal Estate Tax. For example, here’s an article that appeared a few days ago in the New York Times, entitled “Tax the Rich and Their Heirs.”

The current Estate Tax exemption, the amount that can be passed at death tax-free, is $11.58 million (potentially twice that for a married couple). In other words, right now very few American families face the prospect of Estate Taxes.

However, as the cited article recommends, that exemption may be significantly reduced at any time. The only exemption that counts is the one in the law when you pass away – – and a new Congress and President could change that. Joe Biden has released his plan to reduce the Estate Tax exemption to $3.5 million, with everything over that taxed at rates on a sliding scale that cap out as high as 77%, which would place many California homeowners’ families at risk!

The Democratic plan would also repeal the step-up in basis, meaning those inheriting a parent's appreciated property would be hit with capital gains or ordinary income taxes. This could reduce many inheritances by up to 40%. This would effectively be a stealth inheritance tax hitting most of our clients’ families.

What Can You Do?
And Why Not Wait til November?

There are planning techniques, beyond a Living Trust, that you can use now to take advantage of the current large Estate Tax exemption while it’s still in the law. We can help you.

However, if you wait until the November election, there may not be enough time before year end to analyze your options and properly put into place the appropriate strategies. So you may want to do some “pre-planning” now, make your choices ahead of the election and be ready to implement them right away after the November 3 results.

You definitely don’t want to wait until next year. That’s because any Estate Tax change is likely to be made effective retroactively to January 1! Your planning window may get slammed shut!


Call Us Now for a Free Consultation

If you have (or someone you know has) a single estate worth, net of debts and mortgages, over $3.5 million, or a married estate over $7 million, we recommend you look at your Estate Tax planning options now. Call 661-945-5868 to schedule your free appointment.
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