Drastic proposed changes to our current estate and gift tax system may have a dramatic impact on wealth transfer planning. On March 25, 2021, Senator Bernie Sanders released his proposed estate and gift tax reform legislation, which includes lowering the federal estate tax exemption to $3.5 million and the federal gift tax exemption to $1 million. On March 29, 2021, several senators introduced a discussion draft of the Sensible Taxation and Equity Promotion (STEP) Act, which among other things would tax unrealized capital gains of assets transferred by gift or at death.
