Bob Lord, a longtime estate planning lawyer and tax advisor for Patriotic Millionaires, opposes the current tax rules that help ultra-high-net-worth clients save money.
But, after briefing members of the Senate Finance Committee last week on how wealthy families have used strategies like grantor-retained annuity trusts and private placement life insurance policies to cut their taxes, he issued a warning to Democrats that sounded like a challenge for other estate planners.
"These are just the known loopholes," Lord said. "As a tax lawyer, I can tell you: Tax lawyers do not share our more ingenious avoidance strategies."
Lord appeared at a hearing the Senate Finance Committee organized to prepare for upcoming battles over the fate of the Tax Cuts and Jobs Act tax breaks that are set to expire Jan. 1, 2026 — at a time when the Congressional Budget Office is estimating the country will report budget deficits of more than $2 trillion per year.
What it means: For now, the Tax Cuts and Jobs Act tax breaks, including the provision that doubled the estate tax exemption, are the law of the land, and supporters appear to be preparing to mount a strong defense.
The Democrats' views: Senate Finance Chairman Ron Wyden opened the hearing with a somber warning about the upcoming fight over the fate of the 2017 tax overhaul.
"In a matter of months, the Congress will begin a tax debate unlike any in recent memory," the Oregon Democrat said. "This will be a make-or-break moment for the federal budget and America's middle class."
Many Democrats on the committee talked about the programs Congress could fund if ultra-high-net-worth taxpayers paid more taxes.
But Wyden did not unveil a bill focusing on his concerns about use of life insurance in tax planning.
No one presented any other big new proposals for changing U.S. tax rules.
Democrats on the committee expressed frustration about the partisan opposition stalling consideration of proposals introduced by people like Wyden; Sen. Elizabeth Warren, D-Mass.; and Sen. Bernie Sanders, an independent from Vermont.
The Tax Cuts and Jobs Act supporters' case: Sen. John Barrasso, R-Wyo., blasted the possibility of an expansion of the "death tax."
