Editors' pick: Originally published Nov. 15.
Fast repeal. That is what candidate Donald Trump repeatedly promised in regard to the federal estate tax aka the death tax. On his website, Trump minced no words: "The Trump Plan will repeal the death tax."
That means both estate planners and their wealthy clients are now aflutter, trying to decide what their best steps are.
Ending the federal estate tax in fact changes a lot. Right now, the federal estate tax collects 40% of an estate bigger than $5.45 million, or $10.9 million for a married couple. Trump has promised to cut the estate tax to zero, although he does also speak of a capital gains tax - perhaps at 20% - applied to estates above $10 million.
Can he? It will require Congressional approval. Will both the House and Senate agree?
First, understand that maybe 5,400 estates a year are touched by the estate tax. That, said attorney Jay Freireich, a member in the Tax and Trusts & Estates practices at Brach Eichler based in Roseland, N.J., is "approximately only one-fifth of 1% of all deaths." He added that if it stays in place it is projected to collect around $269 billion in taxes over the next ten years, "approximately 1% of all tax revenue to be collected over that period."
A reality: the estate tax may not generate a lot of revenue but people hate it. That includes tens of millions of people whose estates are too small to be taxed. It doesn't matter: they still hate the estate tax.