• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Parman & Easterday

Oklahoma Estate Planning Attorneys

Call Now: (405) 843-6100 |
(918) 615-2700

Attend an Education Program-Oklahoma City Area Attend An Education Program in the Tulsa Area
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • What Our Clients Say
  • Estate Planning
    • Asset Protection
    • Business Succession Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • IRA and Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • Powers of Attorney
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law
    • Emergency Medicaid
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • Asset Protection Worksheet
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Edmond Elder Law
        • Oklahoma City Elder Law
        • Overland Park Elder Law
        • Yukon Elder Law
      • Medicaid
      • Nursing Home Resources
    • Estate Planning
      • An Overview of Estate and Gift Taxes
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s FAQs
      • Asset Protection Planning
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Inheritance Planning for Minors
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Nursing Home Asset Protection
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • Probate Checklist
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Probate Resources
      • Midwest City Probate
      • Moore Probate
      • Oklahoma City Probate
      • Overland Park Probate
    • Published Books
    • Pre Consultation Form
  • Communities We Serve
    • Edmond
    • Midwest City
    • Moore
    • Norman
    • Oklahoma City
    • Yukon
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact Us
Home » Legal Education » Biden Administration Could Reduce Estate Tax Exclusion

Biden Administration Could Reduce Estate Tax Exclusion

February 9, 2021 by Courtesy of Parman and Easterday

Runoff Elections in Georgia resulted in a Senate controlled by Democrats. Could this impact your Estate Planning? It’s possible.

by Steve Hartnett

The estate tax exclusion is the amount you can give without facing an estate tax. Under current law, you may give this amount during life or at your death and after that amount is used, you face a federal tax of 40% on assets beyond that amount. The amount has fluctuated a great deal over the years. It was $675,000 as recently as 2001. In 2021, the exclusion is a whopping $11.7 million per person. This exclusion consists of a “permanent” exclusion of $5 million, adjusted for inflation since a 2011 base year, and then temporaril doubled through 2025 as a result of a 2017 law. So, unless Congress acts to extend the doubled exclusion, it will revert to $5 million adjusted for inflation beginning in 2026. Confusing, isn’t it?

However, Congress could act sooner than 2026 to reduce the exclusion. Congress has tinkered with the estate tax many, many times over the decades. So, this would be nothing new.

Proposals from the Biden campaign indicated a desire to reduce the estate tax exclusion to $3.5 million. Such a proposal would need to pass through the House of Representatives, which Democrats control by a narrow majority of 222 seats to 211 seats held by Republicans, with 2 seats currently vacant. Assuming legislation to reduce the estate tax exclusion were to pass through the House, it would then proceed to the Senate.

At the beginning of January, the Senate consisted of 50 Republicans and 48 Democrats (and independents caucusing with the Democrats) and two seats pending runoff elections in Georgia. Beating long odds, Democrats won both those runoff elections in Georgia, so the Senate is now tied 50-50. This means the Vice President casts the tie-breaking vote in the Senate. Prior to January 20, 2021, Vice President Mike Pence enables Republicans to retain the majority. However, on January 20, 2021, Vice President-Elect Kamala Harris will be sworn in as Vice President and the majority in the Senate will shift to the Democrats.

Thus, beginning January 20, 2021, Democrats will have the narrowest of majorities in the House and Senate. Even with a narrow majority, there are hurdles to passage in the Senate. Senate rules require 60 votes to end debate on most matters. Also, it’s not at all certain every Democrat would agree, as they’re often a fractious caucus.

But, with deficits mounting, Congress may seek to raise revenue from many sources, including reducing the estate tax exclusion. Why wait to see what Congress does? Your best chance of taking advantage of the current unprecedently high exclusion is to use it now.

If you’re married, you could give assets in the amount of your remaining exclusion to a trust for the benefit of your spouse and/or descendants. Your spouse could be the trustee of the trust and would have the ability to use the assets for their support. If you’re unmarried, you could give your assets to a trust for the benefit of your descendants.

January’s political events have altered the political landscape substantially. Consider whether taking advantage of the current estate tax exclusion is right for you. Speak with a qualified Estate Planning attorney about your options.

Stephen C. Hartnett, J.D., LL.M.
Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128

  • Author
  • Recent Posts
Courtesy of Parman and Easterday
Latest posts by Courtesy of Parman and Easterday (see all)
  • Tis the Season for Giving - February 1, 2023
  • Tax Planning for 2023 - January 25, 2023
  • Now That Mid-Terms Are Over, Let’s Talk Taxes - January 18, 2023

Filed Under: Estate and Inheritance Taxes , Estate and Inheritance Taxes in Oklahoma, Estate Planning, Legal Education, Taxes Tagged With: applicable exclusion, Estate Planning

Other Articles You May Find Useful

Parman & Easterday
What NOT To Do When A Trust Is The IRA Beneficiary

Primary Sidebar

Parman & Easterday, LLP

DOWNLOAD OUR FREE ESTATE PLANNING CHECKLIST

SUBSCRIBE TO OUR BLOG

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Where We Are

OKLAHOMA CITY, OK
13913 Quail Pointe Drive, Suite B
Oklahoma City, OK 73134
Phone: (405) 843-6100
Fax: (405) 917-7018

MAP

parman_sidbr_map

Where We Are

TULSA, OK
Memorial Place 7633 E. 63rd Place
Tulsa, OK 74133
Phone: (918) 615-2700

MAP

parman_sidbr_map

Office Hours

Monday9:00 AM - 5:30 PM
Tuesday9:00 AM - 5:30 PM
Wednesday9:00 AM - 5:30 PM
Thursday9:00 AM - 5:30 PM
Friday9:00 AM - 12:00 PM

Footer

footer-logo

The information on this Oklahoma Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Oklahoma City Estate Planning Attorneys at Parman & Easterday offer estate planning services in the Oklahoma City, Oklahoma and surrounding areas. Contact us for help today.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys


© 2023 American Academy of Estate Planning Attorneys, Inc.
  • Facebook
  • LinkedIn
  • Twitter
  • YouTube