How a Trump Second Term Could Shake Up Your Estate Planning
Written by
Laura Beck
Edited by
Chris Cluff
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Wondering if your estate plan needs a makeover if Donald Trump wins in 2024? You’re not alone. With the election just around the corner, many Americans are scratching their heads about what a second Trump term might mean for their hard-earned assets.
GOBankingRates spoke with top estate planning experts to get the scoop on what you need to know when it comes to estate planning under Trump’s potential second term.
Here are predictions for inflation if Trump wins.
Estate Tax Exemption: Going Up, Up, Up?
Alexander M. Evans, an estate planning attorney at Turke & Steil LLP, thinks Trump might keep the good times rolling for ultra-wealthy estates. “Trump has been supportive of maintaining or increasing the estate tax exemption,” he said. Evans adds that this could mean higher thresholds for estates before taxes apply, benefiting the very wealthy.
But just how high could it go? George Pikounis, financial advisor at Burns Estate Planning, gives us the numbers: “If someone has a considerable estate, in excess of just under $7 million, a Trump victory could impact the estate taxes paid because he increased estate tax exemption limits from $6 million to $13.61 million in his first term, and has said he wants to make them permanent if elected again.”
The Shell Game Gets Easier?
Anthony Termini, an expert contributor at Annuity.org, cuts to the chase: “Estate planning is a shell game. It means giving up ownership of assets without really losing effective control.”
He predicts Trump might make this game easier to play, saying, “If Donald Trump gets elected, the only changes I would expect from tax laws will be to make it easier to move assets out of a taxable estate.”
What might this look like? Termini suggests it would come in the form of considerably higher lifetime gift tax exemption. He also believes that the annual gift tax exclusion will be increased substantially.
Lauren Klein, owner and lead attorney at Flourish Law Group, also weighed in on what a second Trump term could mean for your estate: “If Trump pursued policies similar to his first term, he might advocate for maintaining or further increasing the U.S. federal estate and gift tax exemption. This would benefit individuals with larger estates (or who could have larger estates in the future), potentially reducing the number of estates subject to U.S. federal estate and gift tax.”
But don’t pop the champagne just yet if you’re not in the millionaire’s club. Klein added, “It would not benefit the majority of Americans.”
Business Owners, Get Ready
Own a large business? Evans thinks you might be in luck.
He expects continued support for business owners that could influence estate planning for family-owned businesses — “including favorable tax treatments and incentives for passing businesses to the next generation.”
Healthcare Wild Card
But it’s not all smooth sailing. Evans warned that potential changes or cuts to Medicare and Medicaid could influence long-term care planning, “pushing more individuals to consider private insurance options or setting aside larger portions of their estate for healthcare needs.”
Capital Gains: A Win for Your Wallet?
Trump’s first term saw a reduction in capital gains tax rates, and Klein thinks Round 2 could bring more of the same.
“If elected for a second term, Trump could push to keep capital gains tax rates low, which would affect the taxation of estate planning structures,” she explained.
In plain English? If you’re selling inherited assets, you might keep more cash in your pocket.
Step-Up in Basis: The Inheritance Hack That Could Stick Around
Ever heard of “step-up in basis”? It’s a tax rule that could save your heirs a bundle, and Klein thinks it’s likely to stay put under Trump.
“There were certain proposals to decrease the availability for a step-up in basis for assets with larger gains under the Biden administration,” Klein said. “It is extremely unlikely that a Trump administration would pursue similar changes to these laws, keeping this law at the status quo.”
Translation? If you inherit the family home that’s skyrocketed in value, you might be able to sell it without paying a dime in capital gains tax.
The Flexibility Factor
No matter who wins, Cory Krueger, a top Texas probate attorney, stressed the importance of staying nimble.
“Given the unpredictable nature of recent elections, it’s best to keep estate plans flexible to adapt to changing laws,” he said.
Krueger said people should conduct regular reviews with an estate planning attorney to stay informed about potential policy changes. No matter what the political climate, you would be smart to stay on top of your estate.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out How a Potential Harris Presidency Might Impact Estate Planning.
More From GOBankingRates
