For (U)HNW American families, it’s not just COVID-19 which is bringing estate planning into focus. With the US elections right around the corner, and a narrow lead for the Democrats, American’s are analysing what a Democrat win would mean for their wealth.


Former Vice President and Democratic Presidential nominee, Joe Biden, has already voiced ideas to implement substantial wealth taxes which would significantly curb the amount families can pass on without incurring estate taxes. Under the current Republican rules, couples can pass on a little over USD 23 million without paying estate tax (just more than USD 11.5 million for an individual). The regime is expected to be scrapped if the Democrats win. If President Donald Trump wins a second term, the beneficial estate tax regulations will stay in place until 2026, giving wealthy Americans ample time to think about estate planning and structuring.


‘Currently, we don’t have a precise idea of what the Democratic tax regime might look like. What we do know is that Mr. Biden has already announced he would plan to raise state funds by increasing taxes. We expect these will be aimed at the wealthy and corporations. We also think we can probably assume we will see a repeal of the current estate planning rules implemented under the Trump administration. The result is that (U)HNW families are thinking about how they can benefit from the current tax landscape and pass on wealth, in an efficient way that benefits them and their family. They are especially doing this in the context of not expecting today’s estate planning rules to be available under a Democratic President and Senate,’ says Tomas Alonso, Managing Director, ZEDRA Miami.


As always, working with trusted advisors and service providers who understand a family’s individual needs is paramount. But with three weeks until the election, how proactive can wealthy Americans actually be?


In the first instance, if families do want to set estate planning structures in place, there is time. If Republicans win the November election, little will change in the short-term, and if Democrats win, the President will only be inaugurated in early 2021, meaning there is still some time to plan.


‘We work extensively with LatAm clients who are also used to thinking about sweeping political change and how to plan around it to protect wealth. What we always suggest to our clients is that thinking ahead is key. Talk with advisors as soon as possible and explain your personal situation so you they can help you plan an appropriate structure. There’s nothing to say you have to implement that structure today, you can also wait and do it later, when the situation is clearer. What is important however, is that you’re set up to give the green light at the moment you need it and you’ve laid the right foundations – finding the right service provider and going through compliance processes. Then, you are well placed to set the structure in place when you need it, whether that’s now, or after an election,’ adds Tomas.

Please contact ZEDRA Miami for more information.