High net worth people in Kentucky need to be aware that some tax protections for estates may expire within the next few years. In 2016, the Tax Cut and Jobs Act made it possible to leave $10 million in assets to people without taxation. This was a substantial increase from the previous $5 million limit. However, should the balance in Congress change, this could very well be rolled back.
Timelines for tax changes
It’s possible that the TCJA will be repealed in 2021, which means estate planning needs to be considered urgently. There’s a chance that the law will survive until 2025, which is still not that much time to create trusts or transfer wealth to heirs outright. Planning now can help families avoid crushing taxes should the Democrats achieve a majority of at least 60 senators. Even a simple majority of 51 Democrats could mean big changes to tax law.
Be ready to adjust
High net worth individuals should start thinking about how to be tax efficient now. For example, they should consider ways to capture deductions. What charities might they give money to? What tax-advantaged ventures can they get involved in? Given the large stimulus packages required in 2020, it’s likely that in the near future, governments will be looking for ways to increase their revenue.
It’s always prudent to meet with an experienced attorney to discuss estate planning. That’s never been more true, given the uncertainties about the future right now. A good lawyer who pays attention to the news will understand what tools and instruments can help you preserve your wealth and use it the way you want to.