“Couples with estates exceeding $12 million should be speaking to their advisors now about giving money away. It may not be too late to complete advanced trust or partnership planning before the law is enacted,” Harmon said. “Alternatively, an annual giving program can be impactful with enough family members.”
FitzPatrick advises an outright gift to heirs or funding an irrevocable trust. “Many of the strategies and trust vehicles commonly used for estate tax mitigation may lose effectiveness,” he said, including grantor retained annuity trusts, spousal lifetime access trusts, irrevocable life insurance trusts, intentionally defective grantor trusts and all other grantor trusts. He also noted that proposals also seek to limit some discounted gifting or transfer of minority ownership of a family LLP.
New talk in Washington also revolves around limiting the use of Roth IRAs for high earners, back-door Roths and possibly Roth conversions for high earners and other potential limits to retirement plans for the wealthy, Field said.
“We advised our clients to prepare for the worst but to not take any action that could not be reversed until we knew where they tax changes would arrive,” FitzPatrick said.