The coming election and possible change in control of the presidency and Senate is causing concern for many high net worth taxpayers who were assuming that the $10,580,000 estate tax exemption, discount planning, and other techniques were permanent, notwithstanding the law which provides for the exemption to be reduced by half on January 1, 2026. While very unlikely, it is possible that the exemption could be reduced as early as January 1, 2021, if such a law is passed during the calendar year 2021. If such a reduction may occur taxpayers will be well-advised to be able to gift large amounts without necessarily having to transfer their present specific assets. Instead, assets can be sold to an irrevocable trust in exchange for a note that might be gifted or forgiven. There is time to value assets, establish holding companies, sell interests to irrevocable trusts for notes, and otherwise fine-tune a client’s estate plan before the November election so that acting after the November election can be easier and have better results.

This presentation will cover the following items:

• Identify the basic components of the Biden 2-Step planning protocol including the most efficiently transfer assets to a trust in exchange for a note, and, how to reduce, transfer, or contribute the note to use significantly more than half of a taxpayer’s estate tax exemption.


• Special considerations with respect to the timing of a sale.


• What needs to be disclosed on a gift tax return.


• Identify the value of a long-term note issued at the applicable federal rate.


• How to use a lifetime QTIP Trust to make a transfer in 2020 and then decide whether to consider the transfer complete or unwind the transfer or make it incomplete in the second-half of 2021.


• And more.