If the U.S. Estate Tax Is Repealed, Do I Need To Update My Will?
The potential for estate tax repeal is a good reason to break out your estate planning documents for review. Many estate plans revolve around the funding of an exemption trust to hold the estate tax exemption amount and a marital trust to hold assets in excess of the exemption. Your plan may include a gift to a multi-generation trust for a spouse, children, grandchildren, and even great-grandchildren, that is funded based upon the amount of the generation-skipping tax exemption.
If the estate tax is repealed, or if the generation-skipping tax is repealed, or if both are repealed, these changes may raise questions in your current estate plan.
Now is the time to look at your documents and determine how those questions should be answered, in the event the estate tax or the generation-skipping tax, or both, are repealed.
With increased exemptions and the possibility of repeal, income tax planning related to estate plans is even more important and a number of tweaks to existing estate plans could result in significant tax savings.
While we don’t know what is going to happen with the estate tax, or the related gift and generation-skipping taxes, now is the time to begin thinking about the potential ramifications. We anticipate that when tax reform comes, if it does, it will come quickly and there won’t be much time to react before new legislation is in place.