It seems like everywhere you look, people are talking about President Donald Trump. News stories speculate on what a Trump presidency will look like, and the media machine cranks into overdrive with each policy statement and cabinet appointment. One issue receiving significant media attention is Mr. Trump’s tax plan, with particular interest directed toward his plan for the Death Tax. Officially titled the Federal Estate Tax, the Death Tax is assessed when the value of an individual’s estate exceeds a defined ceiling at the time of death. Currently, that ceiling lies at $5.45 million for individuals and $10.9 million for married couples. If an estate exceeds this threshold, the amount in excess is taxed at 40 percent.
Throughout his campaign, Trump publicly expressed his desire to abolish the Death Tax, and the President-elect appears to have doubled down on this stance since winning the election. Executive orders can only do so much, however, and repealing the Death Tax will be no easy task. How far can Trump push this issue? That remains to be seen, but upon taking office, Mr. Trump will enjoy Republican majorities in both the House and the Senate. This will be advantageous as the President-elect attempts to affect the systemic change he touted on the campaign trail. Repealing the Death Tax may prove easier said than done, however. Just ask George W. Bush. During his eight years in office, Bush twice tried to have the Death Tax killed—and twice the vote failed, struck down by Senate Democrats. The situation has not changed since then: abolishing the Death Tax will require 60 Senate votes and the Republican advantage in the Senate is slight, with only a 2-seat majority.
What does all this mean? President-elect Donald Trump has laid out an ambitious agenda for his “First 100 Days,” and while he will probably make a substantive effort to abolish the Death Tax, it is highly unlikely that he can achieve complete repeal barring a significant bipartisan effort. What does this mean for you? While it’s not clear what the future holds for the Death Tax, you can find out how a repeal would affect your estate by talking to an estate planning attorney or financial advisor. Regardless of any particular administration’s policy agenda, however, it is always better to have a plan than not. If you have not set up your last will and testament, give us a call today to get started.