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Estate Planning Update on Estate Tax Reform

Last update on: Jun 23 2020

There could be big changes in the estate and gift tax law by this fall. If these changes are included in the estate tax reform, you must adjust your Estate Planning strategy.

The House of Representatives passed a permanent, full repeal of the estate tax. The Senate is not willing to go that far but is likely to pass a bill that repeals the estate tax for all but a small number of estates. The Senate bill also is likely to significantly reduce the estate tax rate. The two sides will have a conference to decide on a final version.

The Senate version actually might be more attractive to many people. That is because the full repeal of the estate tax also eliminates the step-up in basis for inherited property that we have today. Without that, heirs have to pay taxes on the capital gains that accrued before they inherited property. The Senate version would allow the step-up in basis to continue.

Of course, we’ll be watching developments. We’ll keep you posted and let you know how plans should be adjusted.

Bob Carlson is the editor of the monthly newsletter, Retirement Watch, the monthly video series, Retirement Watch Spotlight, and a weekly free e-letter, Retirement Watch Weekly. In these, he provides independent, objective research covering all the financial issues of retirement and estate planning.

Mr. Carlson, is also Chairman of the Board of Trustees of the Fairfax County Employees’ Retirement System, which has over $2.8 billion in assets, and has served on the board since 1992. He was a member of the Board of Trustees of the Virginia Retirement System, which oversaw $42 billion in assets, from 2001-2005.

Carlson is an attorney. He received his J.D. and an M.S. (Accounting) from the University of Virginia and received his B.S. (Financial Management) from Clemson University and passed the CPA Exam. He also is an instrument rated private pilot. He is listed in several recent editions of Who’s Who in America and Who’s Who in the World.



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