How 8 Advisors Would Respond to Sanders' Estate Tax Hike: Advisors' Advice

Sen. Bernie Sanders, I-Vt., revived the estate tax debate by introducing on March 25 a more aggressive tax hike on estates than President Joe Biden proposed on the campaign trail. Advisors contacted by ThinkAdvisor discussed how a change in the estate tax will affect their clients as well as the planning strategies they'd employ — including rethinking life insurance trusts and using more charitable giving and gifting strategies. Like Biden's plan, Sanders' For the 99.5% Act would restore the estate tax exemptions to the 2009 thresholds of $3.5 million per individual and $7 million per married couple from the current exemptions of $11.7 million and $23.4 million. However, larger estates would be subject to higher tax rates under Sanders' bill. Biden's plan "would retain the 40% estate tax rate currently in place," Andy Friedman, founder and principal of The Washington Update, told ThinkAdvisor in a previous email. "The Sanders bill would increase the rate significantly [to 45% at the low end], topping out at a 65% rate on estates over $1 billion." Said Friedman: "We don't yet know Biden's final estate tax proposal, much less what changes Congress might make to it." Read the gallery above to see how advisors believe a potential change in the estate tax will afffect their clients and practices. Some responses have been edited for length.