The anticipated "Great Wealth Transfer" of the next few decades could see $70 trillion in assets passed down to younger generations. Couple that with economic uncertainty, and many are starting to see bequeathing as the best way to protect their money into the future.

But the federal government may have other ideas, at least in terms of how much can be protected.

“The president and his constituents are discussing reducing the federal estate tax exemption considerably, perhaps as low as $4 million to $7 million,” said Bruce Primeau, a CPA and president of Summit Wealth Advocates in Prior Lake, Minn. “This means that many more clients may be facing a federal estate tax rate of 40% to 50%.”

David Levi, a CPA and senior managing director at CBIZ MHM in Minneapolis, has also talked with many clients of significant wealth “who are concerned about the possible impact of long-term-care costs on their ability to both spend money today or make gifts to their family members.”

“For some clients, we have talked about taking a look at their net worth at the end of each year and, to the extent that it’s grown, they’re generally willing to make gifts, both annual exclusion gifts as well as taxable gifts,” Levi said. “As an advisor, I try to remember that there’s a balance between tax savings and the sleep-at-night factor.”

The federal estate tax threshold is $12.06 million. Several states have inheritance taxes that must be calculated in addition to federal inheritance tax; some states’ thresholds are just a few million dollars.

“The tax consequences can vary significantly in terms of taxation, timing of receipt and the type of assets that could be inherited,” Levi said. “The general rules for inheritances provide that most inheritances are received tax-free by the heir. The primary exception to this rule is when IRAs, 401(k)s or other non-Roth retirement plans, qualified and non-qualified, are inherited. Receipt of those retirement plan assets will likely generate an income tax cost to the heir.”

This tax cost can be managed to some degree, he said, but added that the Setting Every Community Up for Retirement Enhancement (SECURE) Act significantly reduced the flexibility that heirs have in taking money from inherited retirement plans.

Not all inheritances are the same.

“Many times, the inheritance triggered by someone’s death is not a direct inheritance from the deceased, but the termination of a trust created for the deceased at some prior point,” Levi said. “Often, when one spouse dies, a trust is created for the family and the surviving spouse. At the death of the surviving spouse, that trust may terminate and distribute assets to the kids. In this situation, if the assets of these trusts set up at the prior death are not included in the taxable estate of the second spouse to die, there would not be a step-up in basis on the assets coming out of that trust.”

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