Tax laws are changing, and that means that estate plans might change in the future, too. Since tax liability is a major part of estate planning, you might think it’s a good idea to wait until the new administration makes those changes before you put time into an estate plan. That’s the wrong way to look at it, because you need to have a plan as soon as you can.
Most of an estate plan is transferring assets into irrevocable trusts. This isn’t tax related on the whole, and it’s a good way to protect your assets and beneficiaries. Doing this now won’t result in any serious changes later on in most cases. This plan is protective no matter what the tax laws do, so there is little point in waiting to complete an estate plan.
Sometimes, changes in policies can make things harder for you, so it might be better to finish your estate plan now. For example, if you make a plan now and work out the best way for your beneficiaries to go without major tax liability but the laws change to heavily tax them, that’s one possibility. However, as soon as a new administration takes over the government, it may change those rules again or even reinstate the tax rules you used when you set up your estate plan.
No one can predict everything that will happen in the future, so doing what you can now may help you get some of the choices you make grandfathered in. Your attorney can help you understand how your estate plan may be affected in the future by changing legislation.
Source: Financial Planning, “Estate planning when tax laws are uncertain,” Martin Shenkman, March 02, 2017
