The election of a new president always brings the potential for changes to laws, but since the House, Senate and presidency belong to one party now, it is even more likely that laws will change. One thing that has been frequently discussed is changing the way that estate planning laws work, and some believe that the estate tax may be repealed.
The federal estate tax affects very few Americans, and this is because there is an exemption of nearly $5.5 million per person. However, changes to it could lead to other adjustments in laws that could have further reaching consequences. For instance, it is believed that eliminating the estate tax would lead to changes to the capital gains tax system.
If the estate tax is eliminated, the way that people handle certain assets or leave them to individuals would likely change. For instance, people might stop leaving large amounts of money to a spouse to avoid having those assets be considered part of the state. Individuals may also be less likely to take advantage of yearly gift allowances since they may no longer feel the need to distribute assets so they do not count as part of their estate.
Since laws and people’s situation change, creating an estate plan and then leaving it alone isn’t enough. People must also ensure that it is updated as circumstances change. Things like births, deaths, marriages and divorces are common reasons why people may need to alter their, wills, trusts or powers of attorney. It thus can be advisable to meet with an attorney periodically so that a review of the documents can be conducted and changes recommended if appropriate.