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The Wealth Advisor
Planning After the Election: What to Expect Under President-Elect Trump

On January 20, 2017, Donald Trump will become the 45th President of the United States. Earlier in January, the Senate and House will convene with Republican majorities. How you update and manage your estate plan and financial plan under the Republican controlled Congress and Presidency can make a difference in your tax burdens and the way your wealth continues to accumulate. Let’s look briefly at some of the preliminary details of President-elect Trump’s proposals related to estate planning.


Donald Trump’s proposals


Donald Trump has proposed across-the-board reforms in the tax codes, and while he promises to close some loopholes, the general trajectory of his proposals is toward lowering taxes overall. Some pertinent points of his federal tax plan are:

  • Lowering income tax rates across the board, including an increase to the standard deduction;

  • Reducing the number of individual income tax brackets from 7 to 3, with a maximum tax rate of 33 percent (down from 39.6% today);

  • Reducing the business tax rate from 35 percent to 15 percent; and

  • Eliminating the federal estate tax.


Remember that any change to the tax laws requires Congressional approval and will not happen automatically. In spite of Republicans being in control of the Presidency and Congress, there will still be negotiation and compromise reflected in the “final” tax law that comes out of Washington. And even final rules are only “final” until the government decides to change them again.


Recommendations, assuming President-elect Trump’s agenda is put into law:


Be cautiously optimistic. The elimination of the federal estate tax in particular is likely to be welcome news if you have higher net worth (or even if you are on your way there), but this proposal may be subject to opposition or compromise in Congress. This compromise could range from a “sunset” provision to gradual phase-in or something else entirely. We’ll have to wait and see. We cannot assume the “death tax” will automatically be gone on Day 1 of the Trump Presidency.

Remember that an estate plan is broader than federal estate tax. Although estate taxes have long been the focus in many conversations about estate planning, the real reasons for estate planning remain present, no matter who is in the White House and Congress. They include:
  • Incapacity planning for medical or financial decisions;
  • Guardianship for minor children;
  • Directing your financial legacy to your intended beneficiaries;
  • Asset protection for you and your beneficiaries;
  • Income tax and capital gains considerations;
  • Washington State estate taxes; and more.

Preparing your estate for the next administration


Being proactive is the best way to protect your family and wealth. As final laws and rules begin to emerge, you should consider meeting with your financial advisors and estate planning attorney. Depending on your circumstances, there may be some actions that should be taken right away and some that should be put on the back-burner until we learn more about the developing estate and tax planning landscape. For clients who have enrolled in our annual maintenance plan, these developments will be part of our scheduled annual meeting.

As always, we are here to help. Give us a call today to schedule an appointment.

Wishing you a safe and happy holiday season!
Sound Estate Planning, PLLC • 152 3rd Ave. South, Ste. 107 • Edmonds, WA 98020 • (425) 967-7287