It is official today: Donald Trump is the 45th President of the United States. What impact might Donald Trump Presidency and a Republican Congress have on estate planning strategies?
President Trump’s tax plan
A new president and Congress almost always leads to policy changes, and Trump’s tax plan seems to seek to do exactly that. Following are some possible changes that you may see during the next four years:
- The estate tax repealed
- Federal income tax rate brackets will be lowered
- Speaking of federal income tax brackets, the number of brackets may be decreased from seven to three
- Childcare costs will count as a tax deduction
- Conditional matching for Dependent care savings accounts (DCSAs)
- Increased standard joint deduction from $12,600 to $30,000
- Increased itemized deductions cap from $100,000 to $200,000
- Decrease in business tax from 35 percent to 15 percent
Of all of these changes, repealing the estate tax means that no one’s estate will be taxed by the federal government, regardless of the total value of the estate. Additionally, there is talk that gift and generation-skipping taxes may also be repealed. Not surprisingly, the repeal of these taxes means that it is easier to keep wealth within your family and allows you to provide more financial support to your loved ones. They will also better allow you to make charitable gifts and gestures as part of your estate plan.
Final Thoughts on a Trump Presidency
Of course, none of these proposed changes are a foregone conclusion and may change. Paying attention to the political process is important, and my future blogs will address any changes as they occur.
As always, it is important to work with an estate planning professional to take advantage of any legal changes, as well as well-established estate planning principles, to provide for and protect your loved ones. Contact The Rains Law Firm or schedule a complimentary initial meeting for a more detailed conversation about your estate planning options.