Why proposed tax changes are a call to plan.

By Tresp, Day & Associates · October 7, 2021

Every few years, tax proposals surface that would reshape estate and gift planning, cutting exemptions, curbing valuation discounts, or limiting popular trust techniques. Whether or not any given proposal passes, the pattern holds a durable lesson for anyone with significant wealth.

Windows open and close

Favorable rules, like today’s historically high exemptions, are not permanent. Proposals to reduce them, or to restrict techniques like grantor trusts and valuation discounts, can take effect quickly, sometimes on the date of introduction. Families who had planned to “wait and see” can find the opportunity gone.

Proactive beats reactive

The families who fare best treat planning as something to do before the law changes, not after. Using available exemptions through gifting and trusts while the current rules apply can lock in benefits that a future law can’t claw back. Waiting for certainty often means missing the window.

Build in flexibility

Because no one can predict the final law, the best plans are also flexible, using tools (like disclaimer trusts and SLATs) that adapt to whatever rules ultimately apply. Tresp, Day & Associates helps families act on opportunities and stay adaptable as the law shifts. This is general information, not tax advice.