In an article published in GoBankingRates, Reporter Jordan Rosenfeld interviewed Gallet Dreyer & Berkey, LLP, Trusts & Estates Partner David I. Faust about the key estate planning changes individuals should make under President Trump. For example:

If you have any assets to pass on after you die, be they physical ones like property and other possessions, or cash-based, such as money in retirement accounts, CDs, and liquid savings, it’s in your (and your beneficiaries’) best interest to make a clear estate plan.

As President Donald Trump assumes the White House again, all eyes are on the tax changes his administration may try to pass that will impact estate planning. To explore the ways estate planning may change under a second Trump administration, experts suggested what you should know, and whether you should be making any plans now.

Watch for an Expiring Credit

An important thing to know immediately, according to David Faust, partner at Gallet Dreyer & Berkey, is that the federal estate unitary credit is expiring at the end of 2025. For this year, that credit is $13.99 million for individuals, or $28 million for a married couple. 

“The amount which estates will be subject to federal estate tax in 2026 and later years will automatically be reduced to approximately $7 million for individuals, or $14 million for married couples unless Congress and the administration change the law.”

Wait To See if the Estate Tax Is Permanent

On the other hand, the Trump Administration could renew the current, rather high exemption amount and make it a permanent fixture, according to Cory Krueger, an estate-planning and probate attorney and partner at Hensley and Krueger.

That would effectively reduce the need for sophisticated tax estate planning for 99% of U.S. citizens, though he stressed you still need a will. “Everyone should still have a will — it will just make things simpler for those that are under the high tax exemption threshold,” he said.

Unfortunately, nobody can predict with certainty when this, or any other provisions of the Internal Revenue Code, will change, Faust said. It’s best to assume the credit will not be reapproved rather than hope.

Consider These Other Tax Changes

While not directly related to the estate tax, a wide variety of proposed tax changes may also have an impact on estates in general by affecting projected revenue and will factor into if and how the federal estate tax will be changed, Faust said.

These include “raising the limit on deductions of state and local taxes (SALT), reducing or eliminating the tax on tips and social security, lowering the corporate and capital gains tax rates, revising individual income tax rates,” he said.

Consider Reducing Taxable Estate

In the meantime, people should prepare by considering what they can do to reduce their taxable estate, such as making cash gifts, or considering the timing of selling any business or stocks in terms of reducing capital gains taxes, Faust said.

“If you live in a state with a high estate tax of its own, be mindful of whether any action might affect your state estate tax,” Faust warned.

Don’t Expect Retroactive Changes

It’s also good to plan for the likelihood that any changes in the tax law affecting estate or income may not be retroactive, Faust said. “Therefore, it is critical for you and your advisors to keep a careful watch over developments in Washington. Be prepared to act, but wait until there is more clarity about impending changes.”

Prepare To Lose the Step-up Basis

If the estate tax is repealed, another negative tax implication could relate to how taxes are assessed for the beneficiary, Krueger said. For example, estate beneficiaries or heirs-at-law of a deceased individual currently receive a step-up in basis related to inherited assets and property.

This means the value of inherited assets are assessed as of the date of death, which eliminates capital gains tax on any appreciation of the assets prior to the death of the deceased person.

“If this step-up in basis provision is abolished, the beneficiaries and/or heirs will be forced to pay capital gains taxes upon a sale of the inherited assets — which, in turn, could result in inherited assets remaining within the family for a longer period of time versus a sale on the open market.”

Remember State Level Estate Taxes

It’s also important to remember that no matter what happens at the federal level, many states have their own estate or inheritance taxes with lower exemption thresholds, said Yan Lian Kuang-Maoga, partner at Pitta & Baione LLP.

“Ensure that your estate plan accounts for these state-level taxes, as they can substantially affect your heirs’ inheritance,” she noted.

Review and Update Your Estate Plan 

If you haven’t revisited your estate plan since the Tax Cuts and Jobs Act was passed in 2017, now is the time, Kuang-Maoga said. “Work with an estate planning attorney to ensure your plan takes full advantage of the current tax environment.”

Don’t Make Big Changes

Otherwise, Faust suggested that now is not the time to make changes in estate planning, unless there are reasons to do so “other than trying to anticipate what will happen in Washington.” For now, it is merely the right time to prepare and watch, he concluded.