Proposed Estate and Gift Tax Changes Target “Fair Share”  

    While the President’s $2 trillion income tax proposal has garnered most of the headlines recently, there are tax bills in the wings which will soon take the stage to announce dramatic changes to the estate and gift tax rules.  The proposal introduced recently would reduce the estate tax exemption from $11,700,000 to $3,500,000 per individual and increase the minimum estate tax rate to 45 percent, beginning in 2022.  The House version is anticipated soon.  The lifetime gift tax exemption would be reduced to $1,000,000, and only two annual exclusion gifts ($15,000 in 2021) per person would be permitted.  

          Several other key estate planning techniques will be eliminated or curtailed under the Act, if it passes, some of which would take effect immediately upon signature, with others deferred until 2022.  The good news: most estate and gift arrangements implemented irrevocably before enactment would be “grandfathered” for tax purposes.  The caveat: time, under a single-party government, is not on your side.  Our advice:  if you believe these changes may affect the amount of your fair share, you should act now.