A possible Harris victory: What happens to your estate?

With the upcoming 2024 presidential elections, many Americans are wondering how a Kamala Harris presidency could impact their estate planning. Will hard-earned savings be subject to higher taxes? Should one start gifting assets now? Alexander M. Evans, an estate planning attorney at Turke & Steil LLP, noted that Harris might reduce the estate tax exemption. This could lead to an increased focus on strategies to minimize estate taxes, such as gifting and charitable donations. Anthony Termini, an expert at Annuity, emphasized that nothing is set in stone. The composition of the House of Representatives and the Senate after the November election plays a critical role. If the Republican majority in the House remains, significant changes to gift tax exemptions are unlikely. George Pikounis, a financial advisor at Burns Estate Planning, analyzed the situation in detail. If someone has saved two million dollars by the age of 50 and achieves a return of 7% or more, they could pass on more than seven million dollars to their heirs. A Harris victory would likely affect the estate taxes of such individuals, as the exemption threshold, which is currently nearly $13.61 million, could drop to just under $7 million. Evans stressed that even if one is not super-rich, proposals for higher taxes on wealthy individuals could prompt more aggressive estate planning strategies to protect their wealth. Additional health programs under Harris could reduce the need to reserve large portions of the estate for long-term care, thereby altering healthcare cost planning. Cory Krueger, an estate attorney from Texas, agreed and noted that Harris might target income inequality, which could lead to lower estate tax exemptions and higher tax rates. This could increase the tax burden on larger estates and bring more regulation to close tax loopholes. An environmentally conscious approach under Harris could lead more people to include sustainable investments in their estate planning, affecting the types of assets held and transferred. Lauren Klein, owner and lead attorney at Flourish Law Group, however, saw a positive aspect for philanthropic-minded individuals. A Harris presidency could introduce new incentives for charitable donations, such as expanded deductions or credits, which could both promote philanthropy and offer significant tax benefits. Klein also saw potential for improvements in Social Security and other retirement benefits, which could reduce the pressure on personal savings and estate assets, thereby freeing up more resources for other estate planning goals. Given the unpredictable nature of recent elections, Krueger recommends keeping estate plans flexible to adapt to changing laws. Regular reviews with an estate planning attorney and staying informed about potential political changes can ensure that the estate is well-positioned, regardless of who is in the White House. Even though a Harris presidency could bring changes to estate planning, Termini reminded that the majority of Americans do not have taxable estates. It is still wise to stay informed and adjust one's strategy as needed. Remember, estate planning is not just for the super-rich. Whether you are concerned about estate taxes or simply want to ensure that your children are well-provided for, now is the right time to start planning. Your future self and your heirs will thank you.