The Build Back Better Act may eventually contain changes to the tax code that could profoundly impact estate planning. While many such proposed changes in the original bill did not make it through the House, once the Senate acts on the bill and it goes back to the House, a contentious reconciliation process is likely.
The bill is a long way from becoming law, and changes to the tax code may end up in the final version.
Some people, especially the very wealthy with complex estates, have chosen to delay estate planning until there is greater tax certainty. For most of us, estate tax minimization is just one of many aspects of estate planning. Here are some important non-tax aspects of estate planning that shouldn’t be delayed.
Your last will and testament (will) is the primary vehicle for designating how your assets will be distributed upon your passing. (The use of a living or revocable trust with a “pour-over will” can be an alternative.) The assets transferred can be financial, real estate or other items such as art and family heirlooms.
The assets that are controlled by your will can be transferred directly to named beneficiaries; transferred to an existing trust (an inter vivos trust); or transferred to a trust that will be created under the provisions of your will (a testamentary trust). Trusts are very helpful when the intention is to distribute assets at a future date or under specific conditions.