Both the Senate and the US House of Representatives are now working on bills that would reform the federal estate tax (also known as the death tax) before the end of this year. Both bills contain a $3.5 million dollar exemption per person. This would allow an individual Pennsylvania resident to shelter $3.5 million dollars and couples who planned carefully to shelter up to $7 million dollars. It appears, that these bills will probably still require trust planning under a trust or will to do so.
The Senate bill might also reunify the estate and gift tax systems and this would allow the transfer of more assets during a person’s lifetime.
However, the house bill contains a secret or back door tax increase.
It would make minority discounts illegal. This technique has been approved by the tax courts and has allowed families to move farms, and other illiquid assets out to the next generation for many years now. If this change goes through, it would be a loss for moderately affluent families that have illiquid assets.
Stay tuned for more information.
Contact one of David Frees’ convenient offices for an
appointment for estate planning, or for one of our
free guides for executors.
610-933-8069 Ask For Donna or Denise
