If as has been alleged, Biden wins this election and the Democrats somehow get control of both houses of congress, Estate and Gift taxes will go up. Two areas where they have mentioned increases (1) lowering the Unified Credit Exemption from $11 Million to $5 Million. This would mean that individuals worth more than $5 Million or couples worth more the $10 Million will lose some benefits they currently have under the tax code. (2) Raising the Estate and Gift Tax rates to higher levels. What are some strategies to consider before the end of the year?
A. Dynasty Trusts. Make gifts now before the exemption is reduced. If you create a trust for your children and your grandchildren now (not you), you can create you can give up to $11 Million ($22 Million for couples) tax free to be used by your children and grandchildren. If you wait, you can only give $5 Million ($10 Million per couple). So, if you’re really rich, now is the time to make generation skipping gifts.

Another target is preferred capital gains rates. I do believe that will be watered down to a degree, but assume the rate goes from 20% to 30%, then what do you do. (1) You can harvest capital gains now, wait 30 days and reinvest. (2) Utilize a charitable remainder trust over multiple generations. It gives you a small charitable deduction, but allows capital gains to not be taxed unless taken out. So, again, this allows you some ability to make gifts to your children now and keep benefits for yourself, and allows for deferral of capital gains until they are distributed.