The 2020 presidential election could have implications for Nevada residents and others who currently have estate plans. For instance, if Elizabeth Warren or Bernie Sanders become president, there could be a reduction in the gift tax exemption or the estate tax exemption. Today, the gift and estate tax exemptions are set at $11.4 million. While some may choose to wait to alter their plans until anything actually changes, that may not necessarily be the best strategy.
It is possible that changes will come with little or no warning. Furthermore, it can be beneficial to take action today because individuals know what the rules are right now. Therefore, it can make it easier to take action that would keep a plan safe regardless of what happens over the next year or two. For instance, it could be a good idea to gift assets to an irrevocable trust to prevent them from being subject to creditor claims.
Taking this step may also help to minimize the estate taxes an individual pays. The terms of a trust can be customized to allow a trustee or beneficiary to loan money to the grantor. Trusts may also be set up so that an individual is reimbursed for any taxes paid on income that the trust generates in a given year.
An attorney may be helpful to those who are interested in creating a trust to meet their estate planning needs. Going through the trust planning process may make it easier to determine what type of document may be best for an individual’s situation. Legal counsel might be able to further explain that such a document may offer asset protection or other benefits. Finally, individuals may learn more about the cost to create, maintain or revoke trusts in the future.