2021 has been an interesting year thus far. COVID-19 seems to be waning, markets are continuing their rebound, and Washington has been busy. It should come as little surprise that Congress seeks ways to generate revenue given current spending levels. This is usually when chatter picks up regarding tax transfers and this year is no different; if anything, the stakes are even higher. So what has been proposed and how might it affect high net worth estate and gift planning?

Proposal to Lower the Federal Estate Tax Exemption

Families with a net worth of more than $7 million ($3.5 million for individuals) will need to examine the proposed lowered federal estate tax exemption. It is currently $11.7 million per person, and had been increased as part of the Tax Cuts and Jobs Act of 2017. Current exemption amounts are already intended to sunset at the end of 2025 and return to their pre-TCJA levels. On top of this, the Biden administration and the Senate have proposed reducing the exemption to $3.5 million per individual, thus generating potential federal revenue as early as next year.

Read the full article on PBMares’ Wealth Management team’s website.