For many New Yorkers, creating an estate plan does not necessarily mean the process is completed once they have prepared the documents. Updating the plan to address life changes is also important. These changes can be within the family or based on outside considerations. One such outside consideration is the political climate and if there is the potential for new laws and fundamental differences in the philosophy of those who are in power. As the presidential race comes to its conclusion, many wealthy people are altering their estate plans to account for the possibility of a new presidential administration.
Estate planning may need adjustment based on political outcomes
Regardless of one’s political leanings, it is no secret that core beliefs differ with the candidates. If there is a so-called “blue wave” in which Democrats win control of several or all areas of federal government, it will result in a difference in such issues as taxes and protecting wealth in an estate plan. Currently, individuals who have assets worth up to $11.58 million and couples who have double that are free from paying the estate or gift tax. That is set to expire in 2025.
If there is a change to the Democrats being in charge instead of Republicans, that may reduce to $5.49 million for individuals and twice that for couples. Because changes to the tax code are complicated, it is uncertain as to what will happen even if there is a new administration in the White House. Still, people with large portfolios are increasingly adjusting their estate plan to account for possible new laws. That includes setting up trusts and changing trusts that are already in place so it will not negatively impact their 2021 taxes.
Comprehensive estate planning may require legal help
There are many factors that should be assessed when crafting and updating an estate plan. The political ramifications of pending elections are just one issue. Others include financial changes due to the health situation, who the beneficiaries are, if there is the need for a trust, how to value the assets, if there are disputes among family members that were not ongoing when the documents were created, if a special needs trust is required, if there was a divorce or a child being born, and more. When thinking about estate planning in any way, having legal advice is imperative. Calling for advice and help can provide information on how to proceed regardless of the circumstances and goals.