New York residents involved in estate planning may be aware of potential changes for 2017 as President Trump and the Republican-controlled Congress take charge. There are many ways the political climate could affect estate planning measures.
Besides possible changes to the elder law and proposals to decrease business and individual income taxes, Federal estate taxes could be repealed, according to reports. If this can be accomplished, the way capital gains are taxed could change as well. Although less than 0.2 percent of Americans actually pay estate taxes, repealing these taxes is a popular issue among the population. In fact, in 2015, only about 5,000 estate tax returns were filed in the U.S. However, a change in the capital gains taxation will most likely affect many more people.
In regards to changes in capital gains and estate planning, repealing the estate tax system would make it possible for the original cost of a decedent's capital assets to be used in determining the capital gain that is subject to taxes. According to reports, the Trump administration is considering a deemed transfer at death as an alternative strategy. However, this method could trigger a capital gains tax for all assets, whether sold or not, and could make it difficult for heirs to pay the capital gains tax on family wealth and real property. Without estate tax requirements, wealthier people may be able to safely protect their assets and provide more for their family's future. For instance, it may not be necessary for a surviving spouse to receive current distribution income in order to become qualified for the marital estate tax deduction.
Because of the changing political climate, some people may postpone creating or updating an estate plan. Instead, they could speak with an attorney who could help come up with a strategy and help fill out all the essential documents.