Naperville Estate Planning Lawyers Discusses Estate Taxes and the Presidential Election

estate tax, Naperville estate planning lawyerWith a little over a month to go before the presidential election, the formal debates have begun. Along with them comes an increased discussion on the issues and how each candidate intends to improve the country. As might be expected, many voters and, therefore, news outlets have been primarily focused on hot-button issues like foreign policy and the role of government in business. The topic of estate tax, however, has not garnered a lot of press but is an important one nonetheless.

In my practice as an estate planning lawyer, I understand the impact that estate taxes can have on your intended heirs’ ability to receive the inheritance you have intended for them. That is why we offer a variety of planning tools to help you account for whatever estate tax structure is in place at the time of your death.

Current Laws and Possible Plans

Under current law, the federal estate tax does not apply to estates valued at $5.45 million or less. Estates worth more than that are subject to a 40 percent tax. This means that 40 percent of the value of the estate must be paid to the federal government before the remainder of the estate can be allocated among heirs. Democratic presidential nominee Hillary Clinton has proposed lowering the estate tax threshold to $3.5 million while raising the minimum tax rate to 45 percent. Senator Clinton also calls for adding a sliding scale for more valuable estates, with estates worth $500 million or more subject to a 65 percent estate tax.

Republican nominee Donald Trump, for his part, would like to see the estate tax repealed. He and his supporters believe that the earnings and revenue amassed to create the estate have already been taxed by the federal government through income taxes, capital gains taxes, and others. Taxing the right to distribute your estate as you see fit, Mr. Trump maintains, is tantamount to a double tax and “just plain wrong.”

Effects on Family Business

For many people, the difference between an estate tax threshold of $5.45 million and $3.5 million is like comparing the distance between two stars in the galaxy. There is obviously a difference but many private citizens feel like they would never reach the lower number anyway, so there is no real problem.

Those who own family businesses, however, including family farming operations may find themselves well within the estate tax bracket faster than they may have realized. Valuable property, along with expensive machinery, livestock, and crops can quickly add up, making the family operation subject to serious taxes before it can be handed down to a new generation. Burdensome taxes can force a business owner to sell his or her company just to be able to afford paying the government its share, but leaving no business legacy for his or her intended successor.

Contact a Skilled Lawyer

If you are concerned about estate taxes, it is important to take action right away regardless of who wins the election in November. While you may not be able to avoid such taxes completely, an experienced Naperville estate planning attorney can help you ensure that you have taken every step available to protect your estate. Call The Gierach Law Firm at 630-756-1160 for a confidential consultation today.