Death Tax on Death’s Door?

Several Republicans in Congress have proposed a repeal of the Estate Tax - which they’ve named the Death Tax (very ominous sounding, isn’t it?).

It’s called the Death Tax Repeal Act and this isn’t the first time a proposal has come up.

The thing is, with the increased Estate Tax Exemption from the Tax Cuts and Jobs Act passed in 2017, (which brought it up to roughly $25M for a married couple) plus some thoughtful estate planning, and with the correct entity & trust structuring, wealthy individuals already do a pretty good job avoiding this tax.

Usually politician's angle is “the family farm” which will be forced to sell in the event of a death because of this tax. Um... Assuming the couple is married - that family farm would need to be worth over $26M in 2023 for it to even qualify for it (or $13M if the person is single). That’s not a small amount. Currently, only 1.26% of American Households have a net worth over $10M, so the Estate Tax in general already only applied to a small percentage of the population.

Ultimately, if you do have net worth in the tens of millions, there are strategies you can implement to help vastly mitigate the Estate Tax whether or not it’s ever repealed.