The build-up seemed endless. The countdown went on for months. Then, at long last, barely six weeks ago, the U.S. finally held the 2024 Presidential election, which not only handed the White House over to the GOP but also tipped the Senate to the Republicans while preserving – just barely – Republican control of the House.

As we sit waiting for the impact to sink in, among those eager for clarity are financial advisors and tax lawyers, since new governance often means a change in the rules that dictate investment and tax planning. This is certainly true in the specific area of federal estate taxes, where some exemptions are due to disappear in late 2025. What steps should individuals and couples be taking now to protect themselves and their heirs from facing unprepared the potentially larger estate tax burden from Uncle Sam?

To answer that question, we recently discovered this article from Forbes that attempts to address the “what now” question. It was prepared for Forbes by Christine Fletcher, an attorney who writes about managing trusts and estates. Her advice: while there are many unanswered questions in the political tea leaves, those whose estates make them liable for potentially high estate taxes need to proceed with caution and be prepared to follow a carefully-prepared plan once the new rules are made clear.

Election Uncertainty Caused Many to Delay Tax Planning

“Like many people,” Fletcher writes, “you may have put off finalizing estate tax planning 2024 election results were in. Some people held off on any gifting to make a final decision. Others set up trusts and gifted smaller amounts to them as a placeholder. Now that the White House and both houses of Congress are in Republican control, what comes next?”

As Fletcher explains, in 2017 Congress passed the Tax Cuts and Job Acts which, among many other provisions, exempted $13.61 million in assets from federal estate tax. This provision is due to expire December 31, 2025 – but that could change.

“While Republicans have expressed their intention to extend the 2017 tax law within the first 100 days of the new administration,” says Fletcher, “the specifics of this extension remain uncertain. This uncertainty calls for a cautious approach to estate tax planning.”

Narrow Majorities in House and Senate Complicate GOP Plans

Part of the reason for the lack of clarity: the GOP’s slim margin of control. “After the election,” Fletcher explains, “the House will be in the Republicans’ control by a thin majority. Republicans will have a majority in the Senate with 53 seats. However, having a majority in both houses does not guarantee the extension of the 2017 tax law.”

That’s because Democrats opposed to the extension of the 2017 law will likely resort to the filibuster, used to delay or block a vote. As the Forbes article lays out, a filibuster can be avoided in the House by a simple majority vote. Senate rules are different.  There, 60 votes are needed to avoid a filibuster, says Fletcher, adding, “The Republicans will not have 60 votes without support from the Democrats, which is unlikely.”

Some Republicans May Balk at Projected Deficit Hike

Fletcher explains that there is another way for the estate tax exemption to be extended. “To avoid a filibuster in the Senate,” she writes, “Republicans will most likely use the budget reconciliation process. Budget reconciliation is a process that was created in 1974 as a way to expedite the passage of tax and monetary laws. It is a quick way to pass legislation.” Under this rule, simple majorities in the House and Senate could extend the tax law.

But not all Republican legislators share the desire to extend the 2017 law – at least until critical details of costs and funding are laid out. “With an estimated cost [of the extension] of more than $4.6 trillion,” says Fletcher, “adding trillions of dollars to the deficit may pose problems for some Republican lawmakers, possibly delaying the law’s extension. Awareness of these potential obstacles is crucial for effective estate tax planning.”

Byrd Rule Would Sunset Any Extension After 10 Years

Just to confuse things further, Fletcher warns that any extension of the estate tax exemption won’t be permanent. “Another wrinkle of the budget reconciliation process is that any law that reduces taxes must be eliminated within 10 years,” she states. “This is known as the Byrd Rule (after Senator Robert Byrd), which is why the 2017 law is set to expire in 2026. The Byrd Rule can be avoided with 60 Senate votes, which the Republicans likely do not have.”

All this means that, if the 2017 tax law is extended, it will almost certainly be slated to expire within 10 years. “If that scenario occurs estate tax planning should continue to take advantage of the increased exemption,” Fletcher advises. “However, if you were not ready to pull the trigger with your gifting in 2024, you will likely have some breathing room and additional time to make final decisions.”

Some Specific Suggestions for High-Net-Worth Estates

Fletcher has some specific advice for high-net-worth couples determined to shield as much of their estate as possible from a big federal tax bill. (Our suggestion: sit down with your own estate tax planner before acting on these or other published recommendations.)

“Many couples with assets in excess of $50 million already took advantage of the high federal estate tax exemption by gifting $26 million to irrevocable trusts,” she writes. “Those people should continue to top off those gifts by using up the additional exemption available each year, as the exemption is adjusted annually for inflation.”

Fletcher further suggests that, in addition, these high-net-worth couples “may want to consider other estate planning techniques, such as grantor-retained annuity trusts and sales to grantor trusts, which are unlikely to be targeted by the next administration.”

Fletcher also offers advice to those whose estates are one notch below the $50 million threshold. “Couples or individuals in the $20 million to $50 million asset range who have not gifted any money may want to establish a stand-by trust and gift a smaller amount to the trust ($1 million, for example) to get used to gifting and see how it feels,” she suggests. “Depending on the 2017 tax law, they will be able to quickly gift larger amounts to the trust.”

Funding a Spousal Lifetime Access Trust

Many couples have chosen to employ a device called a spousal limited access trust, or SLAT. According to Schwab, a SLAT is “a type of irrevocable trust that can exclude trust assets from estate inclusion while granting limited access to the trust assets to the beneficiary spouse.” The Schwab definition states that a SLAT is a good way to address a projected estate tax liability. This type of trust also allows people to remove life insurance from their taxable estate and to boost estate liquidity, among other uses.

Fletcher suggests that a SLAT can be a useful estate tax planning tool right now. “If you set up a spousal lifetime access trust in 2024 with the plan of gifting $13 million to it after the election and then setting up a second SLAT in 2025 to fully utilize the $26 million available to couples, you should consider moving forward with your plan,” she advises.

If you plan to set up a SLAT for each spouse, Fletcher says to do them in separate tax years. “The longer the length of time between the establishment of each SLAT, the better,” she states. “Now is the time to take advantage of the delay in the likely sunset of the 2017 tax law by creating your SLATs a few years apart. Couples who set up a SLAT in 2012 (when the federal estate tax exemption was scheduled to drop to $1 million), were in a great position to create a second SLAT with the sunset of the 2017 tax law.”

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(originally reported at www.forbes.com)