The first major item on the agenda for the new Trump Administration and the Republican majority in Congress was to repeal Obamacare. However, with the effort to accomplish that currently stalled in a divided House Republican caucus, they are now turning their attention to a major effort on tax reform.
That could lead to very uncertain times for the tax planning portion of estate planning for those in Cincinnati and elsewhere, as the Wills, Trusts & Estates Prof Blog points out in "Trump Administration Sets Sights on Tax Reform."
It was previously expected that part of the tax reform effort would include a repeal of the estate tax. However, it is now uncertain whether that will remain on the table. It was also expected that repealing Obamacare would give Congress approximately a trillion dollars in total savings with which they could partially fund tax cuts.
With those savings no longer available, either some tax cuts need to be scrapped, revenue needs to be raised elsewhere or the federal deficit needs to be allowed to greatly increase.
If Republicans cannot agree on which of those things to do, they will need to compromise with Democrats to get anything passed and dropping the estate tax repeal is a potential olive branch.
Even though the focus has shifted to tax reform, nothing might actually be done for a long time.
The last major overhaul of the tax system was the Tax Reform Act of 1986. That legislation only passed after a long multiyear process, despite bipartisan support for the reforms.
The future of the estate tax could be in doubt for a long while.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: Wills, Trusts & Estates Prof Blog (April 3, 2017) "Trump Administration Sets Sights on Tax Reform."