Truist-Perspectives-AUGUST_2021

Pulse: News
The 99.5% Act—What
could it mean for you?
In March 2021, Senator Bernie
Sanders introduced a new act—the
For the 99.5% Act—which, if passed,
would make significant changes to
the federal estate and gift tax laws.
Here are a few of the highlights:
• Reduction of the estate tax exemption to $3.5 million
per individual and $7 million per couple. The estate tax
would continue to be indexed for inflation.
• Increase of the estate tax rate from 40% and establishment
of a new progressive estate tax rate structure.
• Decoupling of the gift tax and estate tax exemptions.
The proposal seeks to reduce the gift tax exemption
to $1 million per person, and the amount would not be
indexed for inflation.
• Alter the generation-skipping transfer (GST) tax by
placing a maximum of a 50-year term on dynasty trusts.
• Inclusion of grantor trusts in the grantor’s estate for
estate—not income—tax purposes, making this type
of planning essentially obsolete.
• Restriction of grantor retained annuity trust (GRAT)
funding by imposing a minimum term of 10 years and
a required minimum gift amount.
• Elimination of valuation discounts for
nonbusiness assets.
Portions of this legislation may impact your wealth plan,
affecting how you give (and gift) your money. Truist advisors
will know what the legislation entails when or if it passes
and can help you strategize for the most beneficial future.
Contact your advisor to plan your next steps.
Comments regarding tax implications are informational only. Truist and its representatives do not
provide tax or legal advice. You should consult your individual tax or legal professional before taking
any action that may have tax or legal consequences.
August 2021 | 5