Donald Trump wants to repeal the estate tax. Hillary Clinton, on the other hand, would increase the estate tax rate and lower the threshold at which it kicks in, from $5.45 million (or $10.9 million for couples) to $3.5 million (and $7 million for couples). Secretary Clinton’s proposal calls for a 50%, 55%, and 65% rate. The 50% rate applies to estates worth over $10 million per person, 55% for estates over $50 million, and 65% for estates exceeding $500 million.
The estate tax – aka the “death tax” to its detractors—applies to estates of individuals with combined gross assets and prior taxable gifts exceeding $5.45 million (double that for estates of married couples) in 2016. That includes things like stocks, bonds, real estate holdings, small businesses, and retirement assets, among others. While calling it a death tax suggests that the estates of all people who die will be taxed, the reality is that given the size of the exemption, very few Americans are affected. According to a 2015 report from Congress’s Joint Committee on Taxation, 4,700 estate tax returns reporting tax liability were filed in 2013, out of 2.6 million total deaths in the United States. That means the estate tax hits roughly 0.2% of Americans, or 1 out of every 500 people who die. In fact, households affected fall somewhere between the 95th and 99th percentile of all U.S. households: According to the Wall Street Journal, the top 1% of households have a net worth of at least $6.8 million, while the top 5% have a net worth of at least $1.9 million.
Given the sizable estate tax exemptions the estate planning of the vast majority of New Hampshire residents will be unaffected by the candidates estate tax plans. However, estate and gift tax changes are inevitable and should be closely monitored by individuals and business owners.
Author: John Polgrean
We can help you develop strategies for a successful navigation of New Hampshire’s estate planning and estate and gift tax landscape. Please contact Attorney John Polgrean if you have questions or concerns about your business and estate planning. (603) 883-0797. firstname.lastname@example.org
This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion. At Welts, White & Fontaine, P.C. our lawyers have experience with representing families and closely held businesses.