Ballots to Beneficiaries: How Potential Presidential Policies Could Shape the Future of Estate Planning
The 2024 presidential election is only a few months away. As campaign ads ramp up and we enter debate season, the candidates will sound off on their respective positions about a wide range of topics, from the economy, immigration, and education to national security, the environment, and the state of democracy.
It is probably wise to avoid talking politics with your clients in the current polarizing climate. But you should be paying attention to the presidential front-runners and their stances on estate planning-related issues so you can advise your clients accordingly when the next federal government takes shape.
Evaluating the Candidates Through an Estate Planning Lens
Leading up to the 2024 election, surveys consistently show that inflation, jobs, and the economy are the most important issues among voters.1
However, there is significant variance in the way individuals view the economy and the economic issues that are most important to their own financial situation. Presidential candidates are unlikely to use the term estate planning, but they frequently use the language of tax policy to discuss issues that affect a person’s estate value and the inheritance they leave behind.
Here are some policy terms to pay attention to from an estate planning perspective:
- capital gains tax
- estate tax
- gift tax
- income tax
- tax credit
- tax deduction
- tax exemption
- trust income tax
Where the 2024 Candidates Stand on Taxes2
Campaign promises set the tone for a potential presidential administration and what a candidate will prioritize if they take office. Here are the publicly stated estate, wealth, and capital gains policies of the 2024 candidates:
President Joe Biden
If reelected to a second term, President Biden would reportedly tax long-term capital gains and qualified dividends at ordinary income tax rates for taxable income over $1 million and tax unrealized capital gains at death for amounts exceeding a $5 million exemption ($10 million for joint filers).3
President Biden also proposes a minimum effective tax of 20 percent on unrealized capital gains from assets such as stocks, bonds, and privately held companies; higher top individual income tax and corporate income tax rates; and tighter estate tax rules to reduce wealth accumulation through inheritance.4
Former President Donald Trump
Former president Donald Trump has said he plans to make permanent the 2017 individual tax cuts that he enacted during his term under the Tax Cuts and Jobs Act (TCJA).5 He also wants to make the expiring estate tax cuts from the TCJA permanent.6
The unified gift and estate tax exclusion amount is set to expire on December 31, 2025, and revert to pre-TCJA levels that are expected to be around half of what they are in 2024 ($13.61 million per individual/ $27.22 million per married couple).
Robert F. Kennedy Jr.
The only major tax policy that RFK Jr. has announced, according to the Tax Foundation, is exempting Bitcoin from capital gains taxes when the cryptocurrency is converted to or from US dollars.7 He has also expressed a desire to make tax code changes to discourage corporate ownership of single-family homes.8
Chase Oliver
Although the Libertarian Party’s candidate, Chase Oliver, has addressed many issues during his campaign, such as immigration, student loans, and closing regulatory loopholes that reward businesses with close relationships with government officials,9 he has not spoken on too many issues that would impact estate planning. However, the Libertarian Party has traditionally been in favor of limited government, the repeal of the income tax, and the abolishment of the Internal Revenue Service.10
Jill Stein
The Jill Stein 2024 platform calls for raising taxes on the richest Americans. This includes applying the Social Security payroll tax to capital gains and dividends, as well as increasing the estate tax. 11
Cornel West
West’s platform is heavy on economic justice but light on economic policy details. His campaign site says that the candidate would impose a wealth tax on all billionaire holdings and transactions and close all tax loopholes for the “oligarchy.”12
Planning for Tax Law Changes
Whether your clients intend to vote or not, they will be impacted by the next president’s policies on issues related to taxes and estate planning.
Prognostications about election outcomes are challenging, but the candidates present clear contrasts in their visions for America’s economic future. And with nearly $5 trillion of individual and other tax provisions passed in 2017 expiring at the end of 2025—including lower personal income tax rates, higher standard deductions, increased estate tax exemptions, and the expensing of business investment—it is probable that major tax legislation will be a priority for the incoming administration.13
While you might prefer to wait until after the election to offer any concrete estate planning advice to clients, you can begin discussions now about strategies to lock in the “bonus” estate tax exemption and manage potential capital gains exposure.
To discuss specific estate planning strategies for your clients based on their age, wealth levels, estate sizes, and legacy goals, please reach out to schedule a meeting.
- Kirby Phares, Inflation and the Economy Consistently Rank as Top Issues Among Likely Voters—and Here’s Our New Way to Ask Issue Importance, Data for Progress (Mar. 6, 2024), https://www.dataforprogress.org/blog/2024/3/6/inflation-and-the-economy-consistently-rank-as-top-issues-among-likely-voters-and-heres-our-new-way-to-ask-issue-importance. ↩︎
- These are potential presidential candidates as identified by CNN. See 2024 Presidential Candidates, CNN Politics, https://www.cnn.com/interactive/2024/politics/presidential-candidates-dg (last visited July 2, 2024). ↩︎
- Garrett Watson et al., Details and Analysis of President Biden’s Fiscal Year 2024 Budget Proposal, Tax Found. (Mar. 23, 2023), https://taxfoundation.org/research/all/federal/biden-budget-tax-proposals-analysis. ↩︎
- Garrett Watson & Erica York, Proposed Minimum Tax on Billionaire Capital Gains Takes Tax Code in Wrong Direction, Tax Found. (Mar. 30, 2022), https://taxfoundation.org/blog/biden-billionaire-tax-unrealized-capital-gains. ↩︎
- Tracking 2024 Presidential Tax Plans: Where Do the Candidates Stand on Taxes?, Tax. Found. https://taxfoundation.org/research/federal-tax/2024-tax-plans/#Candidates (last visited June 27, 2024). ↩︎
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- Jing Pan, “Robbing Americans of the Ability to Own Homes:” RFK Jr. Has Promised Wall Street Reforms. Here’s His Plan, Yahoo!Finance (May 30, 2024), https://finance.yahoo.com/news/robbing-americans-ability-own-homes-101400283.html. ↩︎
- Platform: What Chase Stands For, Chase Oliver, https://www.votechaseoliver.com/platform (last visited July 1, 2024). ↩︎
- Platform, Libertarian: The Party of Principle, https://www.lp.org/platform/ (last visited July 1, 2024). ↩︎
- Platform: People’s Economy, Jill Stein 2024, https://www.jillstein2024.com/platform (last visited June 27, 2024). ↩︎
- Policy Pillars for a Movement Rooted in Truth, Justice, & Love: Economic Justice, Cornel West 2024, https://www.cornelwest2024.com/platform (last visited June 27, 2024). ↩︎
- Andrew Lautz, The New Cost for 2025 Tax Cut Extensions—$5 Trillion, Bipartisan Pol’y Ctr. (May 13, 2024), https://bipartisanpolicy.org/blog/the-new-cost-for-2025-tax-cut-extensions-5-trillion. ↩︎