While it's clear that President Donald J. Trump wants to scrap the estate tax, it's not clear what financial advisers should be telling their clients as details about the law's demise get sorted out.
Mr. Trump has suggested he wants to eliminate the controversial federal estate tax as part of a larger tax plan. While details are sketchy, he has raised the idea of replacing the estate tax with a capital gains tax imposed on inherited assets. Meanwhile, the gift tax — another popular estate-planning tool — likely will remain intact, experts say.
Oh, just one more thing: All this will likely change in 10 years.
Some advisers, such as David Edwards, president of Heron Financial Group, say the estate-tax limbo is already affecting clients' financial planning.
One of his clients died Jan. 3, and that client's $800,000 estate-tax bill is now “a question mark,” he said.
Mr. Edwards is telling the client's beneficiaries that payment of New York state's estate tax is inevitable, but the federal tax levy is unclear. If Mr. Trump repeals the tax this year, it would likely be retroactive to the beginning of 2017, so the client's estate may not be on the hook for federal tax.