The limits for when estate tax (which is paid on the property or money of someone who died) and gift tax (which is paid on assets given by one living person to another) would kick in are lower with Biden’s tax plan.
Right now, any estate plan or gift plan that includes anything lower than the unified amount of $11.7 million from one individual (or $23.4 million for husband and wife, provided proper planning and execution) in estate assets would not be taxed.
The plan that Biden campaigned for, however, would cut the estate plan limit considerably to $3.5 million, or $7 million for husband and wife, which means that any estate plan that goes above those limits is subject to taxation. Even if Biden does not ultimately push for lowering the exemption to $3.5 million, he may still push for $5.5 million, a figure that is less than half the current exemption.
For the gift tax, the lifetime exemption for gifts would be lowered to $1 million — more than 90% of what it is now.
As for the tax rate on transfers over those amounts, they would be set at 45% — up from the 40% rate it stands currently.