Build Back Better for Estate Planning

This past year, we have seen several proposals that could potentially affect current laws regarding estate and gift planning, as well as the use of certain trusts. While the current version of the Build Back Better Plan in Congress is silent to any changes that would impact gift and estate tax planning, it is still prudent for individuals that may have taxable estates to review their estate plans. Even without a law change, the current lifetime exemption that was doubled under the Tax Cuts and Jobs Act ($12,060,000 per individual for 2022) is set to sunset after 2025 and revert to $5 million per taxpayer, indexed for inflation.

With the potential imminent decrease in the lifetime exemption, increasing real estate values, and an active market for transactions, there may be current opportunities for strategic gift and estate planning to reduce estate taxes, remove future growth from estates, and maximize the use of the higher estate tax exemption while it is available. Making a large gift now could save millions in estate tax in the future. Taxpayers that may have taxable estates one day should consult with their advisors to discuss the estate tax advantages of planning techniques for making large gifts or planning with transfers to trusts including grantor trusts, spousal lifetime access trusts (SLATs), and generation skipping transfer (GST) tax trusts.

Proactive planning in the near future could potentially save your estate and heirs significant taxes.


A recap of the original Bill can be found in this previous DHG Tax Alert.

A recap of the first revised version of the Bill can be found in this previous DHG Tax Alert.

A recap of the second revised version of the Bill can be found in this previous DHG Tax Alert.

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