The new tax law doubles the amount that can be passed to heirs without them having to worry about estate and gift taxes. The amount works out to about $22 million for a married couple, but is only in place until 2025. Due to this, the uber-rich are turning to what are called dynasty trusts, which secures inheritances of their grandchildren, great-grandchildren and beyond.
Blloomberg reports that about a dozen of the nation’s top wealth planners say they’re seeing “increased interest in the trusts as clients look to capitalize on the additional $11 million they can now easily shift over. Some families want to transfer money out of their estates into the trusts in case Democrats take back control of Congress and pull the limits back down before 2025, while others say it’s best to move assets before they appreciate even more.”
Estimates are the new rules affect fewer than 2,000 families per year, but billions of dollars are at stake. A University of California, Berkeley study found that 0.1% of families control a growing share of U.S. wealth, from an estimated 7 percent in 1978 to 22 percent in 2012. The net worth of the wealthy has zoomed even higher in recent years as values of stocks, real estate and private businesses have climbed.