By Steven J. Oshins, Esq., AEP (Distinguished)

I provided a similar analysis in a LinkedIn post in December of 2024. This article will expand that post, and with a similar conclusion.

2025 Tax Act?

The Tax Cuts and Jobs Act of 2017 doubled the federal estate and gift tax exemption with inflationary increases thereafter.

With Donald Trump winning the presidential election and the Republicans winning control of both the Senate and the House, it is extremely likely that there will be a 2025 tax act that will include, among other things, an extension of the current federal estate and gift tax exemption rules.

As soon as the Republicans pulled the trifecta, winning the Presidency, the Senate and the House, the sense of urgency seemed to go away.

There is no guarantee that the federal estate and gift tax exemption rules will be extended beyond 2025. Remember what happened a few years ago when the Democrats had control and couldn’t get a tax act together. This can happen with the Republicans too. A new tax act can be passed without extending all parts of the current tax act. What if the current estate and gift tax exemption rules are part of what is thrown out?

The Republicans hold a razor thin majority of the House. It takes 218 votes for a majority in the House, so the Republicans need nearly 100% to be on board with the new tax act. The Republicans can’t get 60 votes in the Senate, so this will have to drag on through much of 2025 and be passed through budget reconciliation. The longer it takes, the more fear the wealthy will have that they may miss the opportunity. I anticipate a whole lot of Republicans in states with a high state income tax threatening not to sign any new legislation without some increases in the SALT deduction cap. There will be an internal negotiation to get this done. Mark my words.

Rubbing SALT in the Wounds

According to a recent CNBC article titled, “These five Republicans are ready to derail Trump’s tax cuts over the SALT cap,”:

“An influential group of five House Republicans from high-tax states is threatening to hold up a major tax package that is a top priority for President-elect Donald Trump unless they get a significant boost to the amount that their constituents can deduct from federal income taxes to reflect state and local taxes already paid.”

These are merely the five Republicans who have come out with this threat. There are likely many more Republicans in the blue states who will also join in to this fight.

President Trump says that he wants to remove the SALT cap. However, this can’t be done without paying for it elsewhere. That tax revenue must come from somewhere.

This is far from a done deal.

Make your Gifts?

If your net worth is more than $50 million, you need to make the gifts anyway, so get it done now.

If you wait until the second half of 2025, you may find that no good estate planning attorney has any bandwidth to take you as a client. It won’t be anything like 2012 when we had to say no to hundreds of wealthy prospective clients, but we will have to say no to a whole lot of people, so get it done now.

If your net worth is less than $30 million and you’re married and have two exemptions, I suggest sitting on your hands given the likelihood that the exemption rules will be extended and given the ability of a top estate planner to make up for guessing wrong and missing out.

RELATED EDUCATION

If you found this article interesting, you might also be interested in these other educational programs and products about this topic.

• The Spousal Lifetime Access Trust: A Gifting and Creditor Protection Technique
• The Spousal Lifetime Access Trust: Avoiding the Reciprocal Trust Doctrine

ABOUT THE AUTHOR

Steven J. Oshins, Esq., AEP (Distinguished) is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. He was inducted into the NAEPC Estate Planning Hall of Fame® in 2011. He was named one of the 24 “Elite Estate Planning Attorneys” and the “Top Estate Planning Attorney of 2018” by The Wealth Advisor and one of the Top 100 Attorneys in Worth. He is listed in The Best Lawyers in America® which also named him Las Vegas Trusts and Estates/Tax Law Lawyer of the Year in 2012, 2015, 2016, 2018, 2020, 2022 and 2024. He can be reached at 702-341-6000, ext. 2 or soshins@oshins.com. His law firm’s website is www.oshins.com