When Donald Trump was elected president of the United States, estate planners all over the country started to wonder just how much their worlds will change. When politicians make promises on the campaign trail, people tend to take those promises seriously. Donald Trump made a lot of promises during his campaign and many of those promises were a bit lofty. What can we really expect from President Donald Trump in the world of estate planning?
It is important to remember that anything Donald Trump wants to do during his presidency will, contrary to his own beliefs, take time to put into effect. It is more than likely that whatever rules affecting estate planning that are in effect when 2017 begins will still be in effect when 2017 ends. But as we get closer to 2018, people will want to start paying attention to the changes that will affect them.
Repealing the estate and gift taxes put in place by the Democrats has long been a goal of the Republican Party. Most Democrats insist that repealing these taxes would only benefit the rich, but that is not true at all. Estate and gift taxes affect everyone, and any changes to these taxes will alter how people plan for their families in the future.
The Republicans do not hold the 2/3 majority required to repeal laws, but there can still be substantial changes to the existing laws that will have an effect on everyone. There is also the chance that the Democrats in Congress will allow the estate and gift taxes to be repealed in exchange for keeping parts of the Affordable Care Act in place. It is all politics, and we won't know what actually happens until it is done.
While President Trump is going to make some people happy by repealing estate and gift taxes, he could be making some enemies with the wealthy if he goes through with what he has planned regarding capital gains tax. Donald Trump has mentioned in the past that he favors putting a capital gains tax on any inheritance or transfer of money upon death that exceeds $10 million. While this is not something that will affect a large majority of people, it is still something that estate planners have to be aware of.
Donald Trump has promised to repeal the Affordable Care Act, but he won't be able to keep that promise due to his lack of a real majority in the Senate. However, Speaker of the House Paul Ryan and President Trump are dedicated to doing whatever they can to gut and change the ACA to more closely resemble Ryan's ACA alternative that was introduced into Congress in 2015.
Ryan's basic plan would shift costs for health care away from the government and place more cost burden on consumers. If that becomes the case, then wills may have to be amended and estates changed to offer more assistance to surviving family members with special needs and those who need long-term care.
Estate planners all over the country are keeping a close eye on the United States government as it gets closer to the inauguration of Donald Trump. If Trump keeps his campaign promises, then estate planners may have a lot of work to do in the coming years to protect their clients from new laws and taxes.