President Trump’s estate tax proposals have sparked uncertainty among trusts and estates professionals. The current estate tax exemption stands at $13.6 million per individual and $27.2 million per couple, set to expire at the end of 2025. Christopher Desimone of Anderson, Desimone & Green in Roanoke, Virginia, emphasized the significance of the exemption’s future, stating, “Everything else is all minor stuff.”
Graham Leonard, a partner at Harter, Secret & Emery in Rochester, New York, noted that the current situation is a major consideration for trusts and estates professionals.
“Trump and Congress are operating at the federal level, and the federal laws that apply to trusts and estates are primarily tax laws, while state laws govern other areas,” Leonard explained. If no legislative action is taken by the end of 2025, the estate tax exemption will revert to an inflation-adjusted amount of approximately $7 million per individual. Katherine E.
Ramsey, a partner at Virginia Estate & Trust Law in Richmond, Virginia, believes there will be significant pressure to extend the higher exemption. “I can’t imagine they would do otherwise,” she said. The Urban-Brookings Tax Policy Center reported that there were around 4,000 taxable estate tax returns in 2023 with a total liability of $24 billion.
Trump’s estate tax changes debated
Practitioners and commentators commonly expect the higher exemption to continue. Myles B.
Fischer of Harris Beach in Albany pointed out that even if the higher exemption lapses, it may be politically feasible to reinstate it retroactively. He advises clients to take advantage of the current exemption by transferring assets as gifts before any changes occur. “Clients that are high net worth, or ultra-high net worth, should consider making these large gifts sooner rather than later,” Fischer advised.
“We know it’s possible to lock in this current increase and exemption by making gifts up to the exemption amount during one’s lifetime.”
Christopher Desimone noted that the election of President Trump generated urgency among many to transfer wealth preemptively, expecting future decreases in the exemption. However, with the current administration, there has been less pressure as people are confident the exemption will remain stable or potentially increase. Ramsey speculated that there might be a push for a total repeal of the estate tax, although she does not advise clients to rely on that outcome.
“It’s more likely that the change expected at the end of 2025 won’t occur, and we’ll continue to have high exemptions,” she concluded.
