Every 4 years, a change in our Presidential elections results in a flurry of literature, workshops, and newsletters regarding potential changes in income and estate tax laws. This year was no exception, as the significant increase in the federal deficit resulting from costs associated with COVID-19 has placed more pressure on tax increases, including potential tax increases in the estate planning realm. The federal exemption amount, which is $11.7 million as of January 1, 2021, will, under the current law, decrease to about $6.7 million in 2026. Many believe that this decrease in the coupon will occur earlier or may even go down below the $6.7M returning to the former $3.5M. All of this is speculation at this point, but we must be prepared to act quickly, as some of these tax law changes may act retroactively.
