For many of us, documented evidence that billionaires often don’t pay taxes has been a source of pride and anger. Mostly disgust and anger at the confirmation that most of us pay more taxes – both as a percentage of income and in total dollars – than many, if not most, of the country’s billionaires. So if they don’t pay taxes, who will? Who keeps Uncle Sam afloat and pays for all the planned projects the elected officials approve so they can stay in office? Much of this money comes from inheritance taxes, which affect many of our families when our estate is distributed. And if you work for the government and / or have retired, you almost certainly have an estate. And it’s probably more extensive than you think. For this reason, almost everyone should be aware of both current tax laws and pending proposals from the White House and other sources.
The chances of meaningful “tax reform” – as it would help you – are slim this year. Or next. Or the year after. Too many people – accountants, lawyers, auditors, planners and lobbyists – depend on the complexity of our tax laws for a living. The introduction of a flat tax or a flat tax with no limit would make them unemployed. Even if you are an arrogant optimist, it is best to plan the status quo for the foreseeable future. And that in the next few years you will pay more taxes than Warren Buffet, Bill Gates, and Jeff Bezos. But a significant change is possible.
If you want your estate to be treated the way it should be treated, inheritance tax rules and laws need to change and, if necessary, deal with them. And that means being aware of what Congress and the White House have in mind to fundamentally change inheritance tax laws. Changes that could leave your family with a much larger tax liability in the future. The proposals are almost always referred to as “reforms,” a key for you to protect your wealth.
For an update on estate and inheritance tax law – current and planned – I asked Tom O’Rourke to come and see me today at 10 a.m. EDT. He is a well-known Washington attorney who specializes in taxes and estates. If you have any questions, please email them to [email protected] prior to Showtime. He sent us this preview of what he’s going to be talking about and why you should hear it:
“Congress has proposed a number of amendments to tax laws. Senator Sanders introduced the For the 99.5% Act, which could significantly reduce inheritance tax exemptions. The President also proposed several important changes to the tax laws. These changes could affect the income and inheritance tax planning strategies of federal employees and retirees.
While taxes certainly affect all of us, they shouldn’t be at the forefront of any estate plan. Rather, the most important goal is to make sure you have a plan that will protect you and your loved ones. All individuals must have at least one basic estate plan that includes a medical living will, personal financial attorney, and will and / or trust. Once this basic plan is in place, it can be refined to minimize the tax burden. “