The Trump tax plan would eliminate the gift tax, estate tax and generation-skipping transfer tax, and replace those transfer taxes with a capital gain tax on appreciated assets inherited from the decedent. This would completely change how estate planning is done by replacing the current emphasis on reduction of transfer tax to one which emphasizes planning for the reduction of capital gain taxes.
If the Trump proposals become law, current wills and trusts in larger estates would have to be rewritten because they typically provide for formula bequests based on the estate tax law, which would no longer make sense if estate taxes were repealed. The Trump plan would also render moot the recent proposed regulations issued by the IRS which would eliminate valuation discounts for interests in family entities.
