Estate Tax Repeal Included in GOP Tax Reform Framework

[Brian Anderson]

No surprise the elimination of the federal estate tax is indeed included in the tax reform “framework” plan proposed Wednesday by President Trump and Republican leaders in Congress (see link below).

First off, do you think they’ll be able to pass a tax reform bill this year, and if so (and the killing the estate tax is in it), what kind of impact do you think it will have on survivorship life sales and agents that work the HNW market?

Insurance Forums | Repeal of federal estate tax included in GOP tax reform framework

 

[bluemarlin08]

It will absolutely kill second to die sales. When the exemption was lower I sold quite a bit, but don't run in very HNW prospects.

 

[walthamny]

The overall bill makes cash value life insurance plans look better. Lower taxes means lower incentives to contribute max to 401k and pay taxes later. And if you think nothing is being done on the spending side, social security will run out of money so something is going to get done for taxes later on. There is a good incentive to start a cash value life insurance plan now and get grand fathered in for tax free growth. The estate taxes are going no where in many states that have them. Because there is going to be 3000 different rules now. In NJ, if you die and and include a 10K whole life policy in your estate it gets taxed. Make the beneficiary you wife and ask her to donate to the person you want after you die, it is tax free. There is going to be where to die planning module with every financial advisors financial plan book.

The tax plan did not change any rules for foreigners. Come to USA and get a 20, 30 million life policy, earnings tax free life time, estate tax at death, kind of exits on the books but it will continue to be voluntary. So dont expect insurance companies to cry either.

Estate purpose life insurance will get reduced for newcomers, especially young ones. A 30 year old guy, who IPO's his company for 3 billion, he will have less incentive to think about estate taxes.