Estate Planning Strategies When Using Exemptions

Given the current economy and the uncertainty of today’s political climate, many in the estate planning field have their eyes on Washington, D.C., looking to see if dramatic changes to the current transfer tax structure could be imminent. What effect should this have on the estate planning for high-net-worth clients? Should clients act now to use their remaining exemptions by the end of 2020? Might they regret it if the estate and gift tax laws do not change?

In this article, we discuss when it makes sense for certain individuals to make transfers to use exemptions before the end of 2020. We also cover alternatives for those who would want to “unwind” the transfer if anticipated changes to the transfer tax system do not occur, similar to the situation many faced in 2012. These alternative strategies include transfers in trust providing that property disclaimed by the trustee or by the principal beneficiary will revert to the grantor.