If you were making bets today, what kind of bets would you make regarding the estate tax 10 years from now? 20 years from now?

I'm in the camp that believes the government will need money in the future and that this is a low hanging fruit for them to pursue. I also think that with the next round of adjustments, an additional change to step-up in basis will be on the table. With that in mind, I predict they'll "lock in" something around $25M or a bit lower, and that they'll do away with automatic step-up on things like stock but allow it for a homestead or limited amount of real estate holdings.


Your predictions?

Casey TableTennis said:

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I predict estate tax laws will continue to be used as a political football and exemptions and rates will simply move higher/lower based on which party is in control.

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Way to step out there and commit to a number.

Ok, how about this very scientificly derived prediction: Will average 12 mil per year over the next 12 years.

I am very pessimistic about all things govt and taxation. I expect we'll eventually see an end to stretch IRAs and cost basis "step up". I also expect to see the estate tax rules changed to reflect what the left sees as a "fair" amount to inherit.

Thus, why we talk about getting money out of pre-tax vehicles at low rates now and always discuss gift rules and tax efficient methods of moving money from generation to generation.

If I end up being wrong then I guess we're all better off, but I'd rather hope for the best and prepare for the worst.

Stive said:

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If you were making bets today, what kind of bets would you make regarding the estate tax 10 years from now? 20 years from now?

I'm in the camp that believes the government will need money in the future and that this is a low hanging fruit for them to pursue. I also think that with the next round of adjustments, an additional change to step-up in basis will be on the table. With that in mind, I predict they'll "lock in" something around $25M or a bit lower, and that they'll do away with automatic step-up on things like stock but allow it for a homestead or limited amount of real estate holdings.


Your predictions?

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10 years from now I predict the estate tax is indexed up for inflation along the way, but no big changes up or down.

20 years, who knows? My gut is that it will come back down to a round number like $1mm or $2mm per person, but that largely depends on which party dominates the political scene in the 2030s

Casey TableTennis said:

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I predict estate tax laws will continue to be used as a political football and exemptions and rates will simply move higher/lower based on which party is in control.

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This!

It is unlikely that the exemption moves higher in the next decade or longer. I am concerned that it will be lowered.

If the "socialists" get in control it will be a ripe target. In my professional lifetime I have seen the exemption go from around $1 million per person to roughly $10 million per person, where it is today.

If you are thinking about making a significant lifetime gift transfer (that would use the lifetime exemption) I would say a bird in the hand.

Not a wealth manager, but was just interested to see how many people wanted to check out your informal pole...

O think it will go back down to $5 million range.

that looks like more of a formal pole. OP is looking for an informal one.

If you've got enough to worry about estate taxes, why aren't you setting up trusts?

A) This isn't about any one specific client/case

B) If it was, who said there wouldn't be trusts involved?

C) Trusts don't solve every issue with large estate planning.

Stive said:

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A) This isn't about any one specific client/case

B) If it was, who said there wouldn't be trusts involved?

C) Trusts don't solve every issue with large estate planning.

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Chill.

I'm chill. Simply answered your question that didn't seem to have anything to do with the OP (to which you replied).

Speaking of trusts have there been any significant changes over the last few years regarding Limited Family Partnerships?