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Biden’s Tax Proposal: Door Closing on Trusts

By Paul J. Carroll, CFP®October 6, 2021November 28th, 2023Videos


So, Biden has a new tax bill that he’s proposed, and one of the provisions of the tax bill is to aggressively shut down Grantor Trusts. Most people have no idea what Grantor Trusts are. But should this happen, your estate tax bill could be increased significantly.

The proposed tax law as written eliminates the future use of Grantor Trusts that are not already established and signed. It also severely limits the use of irrevocable life insurance trusts and other discounts. There is a small window to wrap your planning that is built into law as long as we can get these Grantor Trusts in place before the bill is signed.

So who does this impact? We’ve got three categories of investors. Category one, less than $12 million in net worth married, or six million single. That’s most people, right? They’re not affected by this. That doesn’t make any difference. Category two, married filing joint, $12 to $20 million in net worth. Single six to $15 million net worth. This is the tricky category. You will probably benefit, but it’s not clear you can afford to take full advantage of the strategies. You need some planning.

Then category three, if you have over $20 million in net worth, if you’re married, $15 million in net worth if you’re single, you need to do this. This is urgent. This will significantly impact your probable estate tax at some point in the future. We’re talking about a difference in two to $3 million in taxation. Your window to take action is measured in weeks, not months. If you’re in category three or category two and need further conversation, give us a call, or give your advisor a call, but you’ve got to act now. We wish you the best of investing success. Thank you.

Founder & CEO at Avion Wealth

Paul is the founder and CEO of Avion Wealth, LLC. He leads a team of wealth managers in building and executing financial plans for high net worth individuals and families. Contact Avion Wealth to speak with a financial advisor.