With a new presidential administration in place, estate planning laws could be on the verge of significant change. Shifts in leadership have brought adjustments to estate tax exemptions, inheritance laws, and wealth transfer regulations—sometimes with little warning. These changes can impact how much of your estate is preserved for your loved ones and how much may be subject to increased taxation.
While no one can predict exactly what new policies may emerge, one thing is certain: waiting to see how things unfold could leave you vulnerable. The best way to secure your financial future is to plan and prepare for it now. Many people delay completion of a living trust and estate planning, assuming they have plenty of time or that things will remain stable. However, the reality is that failing to plan can leave your loved ones vulnerable and unprepared.
How Political Changes Could Impact Estate Planning
Every administration approaches taxation differently, and estate laws are often a key area of debate. Laws affecting estate planning, including tax laws, are constantly evolving. Here are some areas of concern:
1. Estate and Gift Tax Exemptions
The federal estate tax exemption is historically high, allowing individuals to pass on significant wealth without triggering estate taxes. However, it is set to decrease in 2026 unless Congress extends current limits. This could mean higher taxes on inherited assets.
2. Capital Gains and Inheritance Tax Rules
The step-up in basis rule has long been a valuable tool for minimizing capital gains taxes on inherited assets. Some proposals have suggested eliminating or modifying this rule, which could result in beneficiaries paying higher taxes when selling inherited property or investments.
3. Proposition 19 (This law went into effect on February 16, 2021)
This law affects how real estate is transferred to heirs, potentially increasing property tax liabilities for beneficiaries. Planning ahead can help mitigate unexpected tax burdens.
Without proper planning, families may see a larger portion of their assets eroded by unexpected tax liabilities.
Why Early Estate Planning is More Important Than Ever
Estate planning is not just about preparing for the inevitable – it’s about learning what to expect and how to plan accordingly. By making strategic moves today, such as gifting assets or setting up a living trust, you’ll get a head start on securing your family’s future.
In times of political and economic uncertainty, the smartest financial move is to plan ahead. Meet with your Financial Planner, your CPA and Estate Planning Attorney soon. Delaying estate planning could mean missing out on key opportunities to prepare for these unforeseen circumstances. At the very least, a revocable living trust will keep your real estate out of probate.
An up-to-date living trust and estate plan ensures your loved ones are provided for and your wishes are protected. Estate planning isn’t a one-and-done process. Life changes such as marriage, divorce, the birth of a child, a major financial shift, or legal updates require adjustments to your plan. Aim to review your estate plan every 2-3 years or whenever a significant life event occurs.
Don’t Wait – Protect Your Estate with For Living Trust
Have a Comprehensive Estate Plan in Place
At a minimum, your estate plan should include:
- A Revocable Living Trust (to avoid probate and ensure a smooth transfer of assets)
- A Will (to name guardians for minor children and cover any assets not in the trust)
- Durable Power of Attorney (to manage finances if you become incapacitated)
- Advance Healthcare Directive (to make medical preferences clear and appoint a decision-maker)
These essential documents protect you, your family, and your assets. With a revocable living trust, you can make changes throughout your lifetime.
At For Living Trust, we help individuals and families navigate complex estate planning strategies. Our team stays up to date on potential legislative changes so that we can provide proactive guidance tailored to your unique situation.
Don’t wait until it’s too late – contact us today.
