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In 2017, the Trump Administration passed a tax bill that resulted in substantial changes to tax policy in the areas of estate and trusts.  However, those changes were set to “sunset,” or rollback on December 31, 2025.  One topic of interest in the 2024 elections was the different ways that each candidate wanted to treat the sunsetting of the tax policies.

Conventional wisdom believed that a Trump win would result in the prior tax laws being extended, while a win by Kamala Harris would likely result in a rollback of some or all of the tax policies.

Although Trump has not yet taken office and we do not have concrete answers as to his tax policies, most believe the new Trump administration will provide more favorable tax outcomes.  We often hear the phrase, “elections have consequences.”

Below are a couple of the likely consequences of the 2024 election.

1. Estate Tax Exemption and Estate Tax Repeal

• Extension of Current Exemption: The Tax Cuts and Jobs Act (TCJA), passed in 2017, temporarily doubled the federal estate tax exemption to about $13.99 million per individual (in 2025). This provision is scheduled to expire at the end of 2025, causing the exemption to revert to approximately $6.5 million (adjusted for inflation) in 2026 unless Congress acts.
• 2024 Election Consequences: Republicans have historically opposed the estate tax (often called the “death tax”) and have advocated for its repeal. Since Republicans won the 2024 election giving them control of both the Presidency and Congress, most practitioners believe they will likely prioritize extending the higher estate tax exemption.  This will result in an estate tax exemption, per person, exceeding $14 million in 2027 and beyond.  While many Americans may not be impacted by this change, it will provide significant relief for high-net-worth individuals.

2. Capital Gains Tax

• Prior to the 2024 election, President Biden and Vice President Harris had discussed increasing the capital gains tax significantly.  As a reminder, the capital gains tax is a tax on the increase in value of an asset when the asset is sold.  On the one side, Biden and Harris argue that raising the capital gains tax would provide revenue to the government, while on the other side, Republicans argue that doing so would impair investment in American companies.
• Consequences of the 2024 Election:  As a result of the election, most practitioners believe it is very unlikely that the new administration will increase the capital gains tax rate.  As a result, American investors will have an incentive to invest in American companies, allowing those companies to grow and employ more Americans.

3. Impact on Gifting Strategies

• Lifetime Gifting: With Republicans likely to favor lower taxes and higher exemptions, wealthy individuals may use lifetime gifting strategies to pass wealth to heirs without triggering estate taxes. Under current law, individuals can gift up to the exemption limit without facing estate tax consequences. If Republicans extend or increase the exemption, this would encourage accelerated gifting of assets to children or grandchildren, especially to avoid the potential lower exemption amount in 2026.
• Wealth Transfer via Trusts: Families may continue to rely on irrevocable trusts, family limited partnerships, or generation-skipping trusts to transfer wealth to heirs while reducing estate tax exposure. These strategies help move assets out of a taxable estate while maintaining control over the assets.

4. Changes to Tax Rates for High Earners

• Tax Priorities: Republicans generally favor tax cuts for high earners and businesses, believing that lower taxes stimulate economic growth and job creation. Accordingly, we are unlikely to see increased taxes on the wealthy, and we might even see further tax cuts, particularly for those in higher income brackets. This could include reductions in individual tax rates or corporate tax rates, which would benefit high-net-worth individuals.
  • Impact on Estate Planning: Lower taxes and continued high exemptions make it easier for wealthier individuals to plan for large wealth transfers, including intergenerational wealth and passing assets to heirs without incurring heavy tax burdens.

5. Impact on Charitable Giving 

• Charitable Contributions: With a Republican win, the focus on reducing taxes and encouraging private giving may continue. High-net-worth individuals often use charitable remainder trusts (CRTs) or donor-advised funds to reduce their taxable estates while contributing to charitable causes.
• Tax Deductibility: Republicans generally support policies that encourage charitable giving as a way to reduce taxes, so it is likely they will continue to preserve or expand tax deductions for charitable contributions. This would remain an important strategy for high-net-worth individuals seeking to reduce their taxable estate while supporting causes they care about.

6. Possible Impact on Trusts and Family-Owned Businesses

• Protection of Family-Owned Businesses: One of the key concerns with the estate tax is the potential burden it imposes on family-owned businesses, especially when the value of the business triggers estate tax obligations. Republicans are likely to continue efforts to protect family businesses from estate taxes by advocating for increased exemptions or full estate tax repeal.
• Trusts: The use of trusts to minimize estate tax exposure could remain a cornerstone of estate planning for high-net-worth individuals. Republican policies are generally supportive of these mechanisms as ways to preserve wealth across generations.

Consult with an Estate Planning Attorney to Strategize for Upcoming Changes

The results in the 2024 elections will likely have significant consequences for estate planning, wealth management, and tax policies, particularly in regard to the estate tax exemption.

Key implications include:

• Extension of the current, higher estate tax exemption or full repeal of the estate tax, allowing individuals to pass on more wealth to heirs without incurring tax obligations.
• Preservation of lower capital gains tax rates for high earners, making it easier for wealthy individuals to grow and transfer wealth.
• Encouragement of lifetime gifting and the use of trusts to transfer assets while minimizing taxes.
• A continued focus on tax cuts for the wealthy and possibly lowering taxes for high-income earners.

Wealthy families and individuals should consider consulting with estate planning professionals to adjust their strategies in anticipation of potential changes following the 2024 elections.  The estate planning attorneys at Ford + Bergner LLP have been assisting Texas families with their estate planning needs for over 25 years.

To discuss your options for wealth preservation,  Contact us to schedule a consultation.