The biggest concern is that the White House administration and Congress will be swept away by a “blue wave” brought by the victories of democracies, which would give Biden the power to propose and adopt a comprehensive plan for fiscal reform.
The rich are particularly concerned that an exception that allows them to leave up to $ 11.58 million without tax on assets or gifts could be abolished before its expiration date in 2025.
Democrats want to raise inheritance taxes to the “historic norm,” according to the party’s platform. That would mean reducing the exception to $ 5.49 million, the level that existed when President Trump signed the tax reform that includes benefits for companies and wealthy Americans in 2017, consultants said.
It is unclear where the election will lead or whether a tax reform will be adopted. Changing the tax code can be complex and time consuming. But Biden is rising in opinion polls, and wealthy people are rushing to set up trusts and review existing ones before the end of the year to avoid the tax consequences in 2021.
“The $ 11.58 million question is, ‘What will happen except for gifts and assets,'” said Toni Ann Kruse, a New York real estate lawyer who advises high-income people. “We don’t know who will win the election or who will control the House or the Senate, and all of these factors will play a role in what might happen.”
Biden would also “bring the inheritance tax back to 2009 levels” to fund paid family and paid medical leave, according to its website.
His plan also includes raising taxes on long-term capital gains, which represent the profit from the sale of assets whose value has been assessed. Taxpayers with incomes over $ 1 million would pay a profit tax of 39.6%, instead of the current tiered approach, which is 20% for people with incomes of at least $ 441,450.
Biden campaign spokesman Andrew Bates reiterated in a statement the candidate’s intention to change tax legislation in a way that benefits less wealthy people.
“Joe Biden is running to rebuild the backbone of this nation – the American middle class – by making sure our economy rewards work and not just wealth,” he said.
Rising demand for a change in wealth management plans intensified in June, when Biden outperformed Trump in polls, consultants said. Several companies have said they have been overwhelmed by demand since then and expect business to grow further by the end of the year.
The tax-related workflow is three times higher than the usual level at Miller Samuel, a New York-based wealth assessment firm, said CEO Jonathan Miller.
“We are inundated with applications for gift and inheritance tax assessments,” he said.
Philip Michaels, a New York-based wealth planning and tax attorney, added that in the past few months, about 15 clients with high net worth have requested a review of inheritance plans.
Rockefeller Capital Management, a financial consulting firm in New York, organizes virtual events for clients, while working with legal and tax advisors to analyze the nuances of possible legislation, said Joe Roberts, a senior wealth analyst.
Customers are concerned about a “rapid and drastic departure” from the current status quo, Roberts said.
At the same time, some customers are worried about not making decisions too early. This is because trusts created for life exemptions are not easy to change.
“It simply came to our notice then. “People are asking, ‘Do I really want to give this away?'” Said lawyer John Olivieri, an asset management planner for heritage in Indianapolis.