With the inauguration of President Joe Biden and Democrats controlling both the House and the Senate, legislative changes that could affect wealthy Americans are expected to be enacted at some point within the next few years. Biden has often said that the wealthy are not paying their fair share of taxes, and this could mean changes to estate tax laws and exemptions. It may be beneficial for wealthy individuals in Louisiana to take estate planning steps now to avoid financial loss in the future.
Biden has stated he plans to pass legislation that will reduce tax exemptions for both gifts and estates. He also plans to raise taxes on these two things, bringing rates back to what he calls historic norms. Specifically, this means the amount a person could transfer without paying estate taxes would be $3.5 million. This also lowers the lifetime exemption amount for gifts to $1 million.
While these changes are possible, they are not definite. However, this is the time to make adjustments to estate plans to prepare for this possibility. Experts believe it could be a year before any tax-related legislation comes up for consideration, but it is wise not to delay on making necessary updates.
Estate plans are never set in stone. Wealthy individuals can use the estate planning tools available to them to make plans that will reduce taxes while still protecting their wealth. When considering updates or additions to an existing plan, it may be beneficial to work with a Louisiana attorney who can help one make choices that will make sense well into the future.