Many people have asked me how estate planning might change if Congress repeals the federal estate tax. As you can imagine, any predictions of this kind are highly speculative. But most people who need an estate plan under today’s laws will still need one in 2018 and onward. Here are the principal reasons why:
(1) Even if the estate tax is repealed it can come back. The estate tax has changed many times over the past 90 years. It is one of America’s most controversial laws and you can be sure that a constituency will exist for rolling back any successful reform, especially if the reform lacks bipartisan agreement.
(2) Washington, D.C. and Maryland impose taxes on sizeable estates. As mentioned in my previous blog post, D.C. and Maryland are increasing their estate tax exemption to be more competitive and attract investors and taxpayers from neighboring states like Virginia. If your net worth exceeds the current federal exemption indexed for inflation, however, an estate plan may be necessary to prevent your beneficiaries from overpaying.
(3) An estate plan is about more than taxes. An estate plan is an opportunity to express your values, make healthcare decisions, and make guardianship arrangements for minors. It also provides beneficiaries with important legal protections during major life events such as debt and divorce. Estate plans often create disincentives for frivolous lawsuits and preserve family unity. For all the above reasons and more, tax reform is unlikely to have a major impact on your need for a personalized estate plan.
I. Re-branding the Practice
Because I generally represent clients in private sector venues as opposed to tribunals, I have re-branded my practice: Eisler Counsel & Advocacy.
II. Increased Availability for Fulfillment of Retainer Agreements
To ensure my estate planning and business services are available to clients who have retained me on a long-term basis, I will not be offering those services to the general public in the foreseeable future.
Rather than focus on volume, I want to make sure I can continue to provide a personalized experience for my loyal clients, some of whom have been with me since the very beginning of my practice.
I will continue to offer mediation services to help interested parties in Montgomery County, Maryland find alternatives to litigation that can save clients money and lessen the burden on the court system.
We still do not know what the federal estate tax will be in 2018 (or even if there will be one). However, both the DC Council and Maryland legislature have made known their local estate tax plans:
In 2018, the District of Columbia will exempt $5.49 million from the local estate tax (or about $11 million for couples who file the right paperwork), effectively repealing the tax for most people.
Following suit, Maryland will increase its exemption to $4 million in 2018 and then plateau at $5.49 million in 2019.
For the remainder of 2017, D.C. will continue to tax estates with a gross value of more than $2 million and in Maryland the exemption is $3 million.
Of course, laws and budgets can change. So you should always check your information is current before making any decisions.