How a Potential Harris Presidency Might Impact Estate Planning
With the 2024 election looming, many Americans are wondering how a Kamala Harris presidency might shake up their estate plans. Will your hard-earned savings be hit with higher taxes? Should you start gifting assets now?
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GOBankingRates talked to estate planning experts to get the scoop on how a Harris presidency may affect your estate planning.
Also see how Harris could impact the upper middle class, if elected.
Estate Tax Changes: Brace for Impact?
Alexander M. Evans, an estate planning attorney at Turke & Steil LLP, said Harris might lower the estate tax exemption. “This could lead to increased focus on strategies to minimize estate taxes, such as gifting and charitable donations.”
But don’t panic just yet. Anthony Termini, an expert contributor at Annuity, reminds us that it’s not a done deal.
“The big caveat to any estimated changes in the estate tax is the composition of the House and Senate after the November election,” he said. “If Republicans maintain their House majority, there is not likely to be much change in the gift tax lifetime exemption.”
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What’s Your Magic Number?
George Pikounis, financial advisor at Burns Estate Planning, broke down the ideal number to have saved for retirement.
“If someone has $2 million saved by the time they’re age 50 and their rate of return is 7% or higher, it’s conceivable they’ll pass down more than $7 million to their heirs,” he said. “In that case, a Harris victory would more than likely impact their estate’s taxes because exemption limits, which are currently nearly $13.61 million, could revert to just under $7 million.”
Even if you’re not ultra-wealthy, Evans pointed out that “proposals for higher taxes on the wealthy might prompt individuals to explore more aggressive estate planning strategies to protect their wealth.”
Healthcare and Social Programs
Evans suggested that expanded healthcare programs under Harris could reduce the need for individuals to allocate large portions of their estate for long-term care, altering how they plan for healthcare costs.
Similarly, he said, “Increased funding for social programs might reduce the need for individuals to earmark large portions of their estate for family support, shifting focus to other areas such as philanthropy or education funding.”
Regulatory Rollercoaster
Buckle up, because Evans predicted, “A Harris administration might implement more regulations, potentially impacting the complexity and cost of estate planning, necessitating more sophisticated planning and advisory services.”
Cory Krueger, a Texas probate attorney, agreed. He said Harris “could focus on policies that address income inequality, possibly resulting in lower estate tax exemptions and higher rates, which could increase the tax burden on larger estates. They may also implement more regulations to close tax loopholes.”
Green Is the New Black
Eco-conscious? Evans pointed out that under Harris, there might be more of an emphasis on environmental policies. This “might lead to more individuals incorporating sustainable investments into their estate plans, influencing the types of assets held and transferred.”
Charitable Giving: Your New Secret Weapon?
Lauren Klein, owner and lead attorney at Flourish Law Group, said a Harris presidency might have a silver lining for the philanthropically inclined.
“Under a Harris administration, there is the potential for the expansion or introduction of new incentives for charitable giving, such as enhanced deductions or credits,” Klein said. “These tax incentives could encourage philanthropy and provide significant tax advantages for those who incorporate charitable giving into their estate planning, allowing them to support causes they care about while simultaneously reducing their taxable estate.”
So, if you’ve been thinking about leaving a legacy to your favorite charity, a Harris presidency might give you even more reasons to feel good about your generosity.
Retirement Planning: A Weight Off Your Shoulders?
Klein also pointed out a potential bright spot for your golden years.
“It is possible that a Harris administration could strengthen Social Security and other retirement benefits,” she said. “This would reduce the pressure on personal savings and estate assets to cover retirement needs, allowing individuals to allocate more resources toward other estate planning goals.”
In other words, you might be able to worry less about stretching your nest egg and focus more on other aspects of your estate plan.
Stay Flexible, Stay Informed
“Given the unpredictable nature of recent elections, it’s best to keep estate plans flexible to adapt to changing laws,” Krueger advised.
He said people should start conducting regular reviews with an estate planning attorney and stay informed about potential policy changes. That will make sure their estate is in a good place, no matter who is in the White House.
While a Harris presidency could bring changes to estate planning, Termini said, “The overwhelming majority of Americans do not have a taxable estate.”
Still, it’s smart to stay informed and consider tweaking your strategy.
Remember, estate planning isn’t just for the ultra-wealthy. Whether you’re worried about the estate tax or just want to make sure your kids are taken care of, now’s the time to start planning. Your future self, and your heirs, will thank you.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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