Perhaps the only thing that is certain is that the political landscape throughout California and the United States as a whole is changing. Each political party has stated their case, and the voters have made a decision. Along with the many other changes that will gradually come in to play, many estate planning experts are expecting there to be some changes in the estate planning process.
One of the looming questions revolves around what will happen to estate taxes as they currently stand. While the current estate tax only affects a small percentage of Americans, it does produce approximately $20 billion in annual revenue. Currently, individual estates less than $5.45 million are exempt from federal estate taxes. There has been some talk of a repeal of the estate tax; however, there has also been some talk of a capital gains tax. While it is believed that there would be a $10 million exemption on such tax, there are still questions regarding how such a tax would affect one's inheritance.
Estate planning remains an important concern for many Americans. Rather than focusing on estate planning as a process of avoiding taxes, however, most view it as a way of transferring assets. There remains the question as to whether a will or a trust is the appropriate tool in a given situation. While a will is often the more cost-effective approach, it does require probate and court involvement. A trust, on the other hand, offers the ability to transfer assets without the publicity that court involvement can create.
Many California estate planning experts are waiting to see exactly what will happen in the coming weeks and months. As with any new administration, there will certainly be changes. How these changes will affect the individual is yet to be determined.
Source: cnbc.com, "Estate-planning pros take wait-and-see approach to Trump", Andrew Osterland, Jan. 11, 2017