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The president, trusts, and other estate planning details

When President Obama takes to the stage to give a State of the Union Address, it goes without saying that millions of people tune in to get his thoughts on a variety of topics. While some people agree with what he says, others take issue.

Since his most recent State of the Union Address, many people have been discussing the proposed ending of the step up provision.

As noted by WealthManagement.com, if Congress agrees with the president "it could mean sweeping changes in how inheritances are taxed—and how estate attorneys help their clients deal with that."

Simply put, the proposal would eliminate a tax benefit related to how inheritances are treated. The same article by WealthManagement.com went on to discuss the change in greater detail:

"The plan would tax capital gains on the decedent's basis, instead of the current system that allows a step-up in basis for assets passed on to heirs."

While the president has plans to close what he refers to as the "trust fund loophole," this change would impact people of all financial classes, not just those who are considered rich. The final result would be less money for estate beneficiaries. And that is not something most people are going to be happy about.

As you go through the estate planning process, you will begin to consider your current situation as well as what will happen to your assets upon your passing. Changes to federal and state laws can throw you for a loop. This is why so many people rely on the services of a well educated estate planning attorney.

Source: WealthManagement.com, "Is the “Step-Up” Stepping Down?" Jason Smolen, Feb. 04, 2015

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