On Wednesday, April 26, the Trump administration released its anxiously awaited tax plan in the form of a one-page document entitled “2017 Tax Reform for Economic Growth and American Jobs.” Although scant in detail, the plan focuses on corporate taxes and individual income tax rates, and calls for the immediate repeal of the “death tax.” There is, however, no mention of gift taxes, generation skipping transfer taxes or carryover basis.
It is also unclear when further details will be forthcoming. The administration vows that “throughout the month of May, the Trump administration will hold listening sessions with stakeholders to receive their input and will continue working with the House and Senate to develop the details of a plan that provides massive tax relief, creates jobs and makes America more competitive—and can pass both chambers.” The Nixon Peabody Private Clients group is monitoring this process and will provide further analysis as details become available, including whether updates to estate plans will be necessary.
In the meantime, there are plenty of reasons to continue to do estate planning even in light of federal estate tax repeal. Estate planning is necessary for many reasons other than reducing federal estate taxes, including to minimize the state estate tax, to plan for the avoidance of probate and to engage in trust planning for asset protection purposes. Not to mention the fact that, unless the Trump administration is able to obtain a 2/3rds vote for passage in the Senate (an unlikely scenario since this would involve obtaining the votes of Senate Democrats), any tax plan passed would automatically expire in 10 years, reverting back to the system we have today.
Until further details become available there can only be uncertainty and speculation. Be assured that the Nixon Peabody team will keep you apprised as this process unfolds and help you navigate the uncertain tax landscape ahead.