While Georgia residents are not likely to be directly affected by a repeal of the federal estate tax, such a repeal could affect the capital gains tax associated with estates, and this might affect a larger number of people. However, this does not necessarily mean that waiting until the new administration takes office and passes new laws is the best approach. Any estate plan made at any time might always be created in an environment in which laws could change. Therefore, what some people might want to do is go forward with a plan based on existing law with an eye to the possible changes ahead.
An estate tax repeal is likelier than a repeal of the gift tax because the latter affects the collection of income tax. If the estate tax is repealed, some aspects of preserving wealth will be simplified. For example, it will no longer be necessary to take certain steps to qualify for the marital deduction.
However, the result of repealing the estate tax could be a shift in how capital gains taxes are assessed and collected. It is possible that capital gains taxes might be levied on a “deemed sale” of assets at the date of the owner’s death. As a result, assets could be jeopardized because heirs might lack the cash to pay the tax.
Estate planning can be a complex process, and in addition to changes in tax law, there may be other changes that prompt a review of the documents. For example, a person may have more children or get a divorce after preparing a will. Remarrying and starting a new family means an individual should make certain that children from the first marriage are still included in the estate plan and that beneficiary designations are up to date.
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