During my Estate Planning Attorney’s 30+ years as a senior attorney at the IRS and his subsequent career as a tax consultant, he has seen an ongoing struggle over the rate of tax to be imposed on estates.  Generally, this ebb and flow has pitted Republican Party attempts to eliminate the estate tax vs. the Democratic Party’s attempts to increase the estate tax rate.

The peripheral battle has seen many of the traditional “shelters” lost but offset in many ways by the unlimited marital deduction and the graduated $5.4 credit shelter and portability. Additionally, the Congress imposed a generation skipping tax to prevent extremely wealthy families from escaping estate tax in successive generations.

What is on the horizon as we enter the last weeks before the presidential election? While he has not not seen an exact plan for the estate tax’s future if the Republicans prevail; Candidate Clinton has discussed raising the maximum rate to 65% with additional brackets at 45%, 50%, 55%, and 60% along the way.

Clinton Tax Plan

Hillary Clinton proposes raising taxes on high-income taxpayers, modifying taxation of multinational corporations, repealing fossil fuel tax incentives, and increasing estate and gift taxes.

Trump Tax Plan 

His plan would significantly reduce marginal tax rates on individuals and businesses, increase standard deduction amounts to nearly four times current levels, and curtail many tax expenditures.

This coupled with the attack on Section 2704 FLP discounts will mean that virtually every family of substantial wealth will have a serious dent put in its attempt to pass wealth from one generation to the next.

This factual pattern should alert the most skillful of estate planners to create new techniques to offset this impending increase in estate tax rates.

For more details see our previous post Time to Compare Candidate’s Tax Plans Again! where we discussed Hillary’s plan for restoring fair taxation on multi-million dollar estates.