Last time, I talked to you about the infrastructure bill debate in Washington and how the government might pay for it if it passes.
One very likely possibility is the government increasing taxes on your 401K. Since such a tax would directly affect my clients’ retirement income, it’s no surprise it is one of the more common topics of discussion I have with them.
Another possibility, and one less talked about (because it does not directly affect an individual but rather their heirs), is the government increasing estate taxes.
The current administration has already floated several potential changes to estate taxes, such as:
- Eliminate “step-up-in-basis.” Currently, heirs can receive an asset such as a stock or home at its current market rate, allowing the heir to sell the asset without paying tax on the appreciation over the owner’s life. Eliminating “step-up-in-basis” would enact a tax on the asset.
- Reduce the amount individuals can transfer without paying estate and gift taxes.
- Raising the current tax rate from 40%
If you plan to leave money behind for your family, it’s critically important to understand the implications of changes to current estate tax laws. Call us today at 513-563-PLAN (7526) or book online here to schedule an appointment to discuss if your estate is set up in a way that benefits your heirs.
Regards,
Nikki Earley, CFP®
