There may be two significant changes in the estate world during 2017, with the emphasis on "may."
First and most significantly, does President Trump and the Republican Congress follow through on his campaign position to repeal the estate tax. Estate tax repeal could be part of comprehensive income tax reform, or could drop off the priority list during political and budget bargaining.
On one hand, with federal exemptions now at $10,980,000 for married couples and so few taxpayers subject to estate tax, why shouldn’t the "very wealthy" pay estate tax at their deaths on assets exceeding those amounts? Besides, we need the revenue. On the other hand, the "very wealthy" have paid significant income taxes during their lives; why should assets they accumulate after paying income taxes be subject to another layer of tax when those assets pass to their children and descendants? Particularly, in the case of a family business, where the 40% estate tax makes it difficult to pass family businesses to the next generation. Plus, with few taxpayers now subject to estate tax, why devote the resources to collecting a tax on so few?
As with any complicated issue, there are nuances to each of these positions, such as how would elimination of the estate tax affect charitable bequests: would the wealthy leave less to charity and more to family if there was not the need for a charitable estate tax deduction? Also, with appropriate planning, even family businesses can pass to children and future descendants without paying much or any estate tax.
This latter point, how to pass assets to family and pay less estate tax, is the second major estate issue that will likely be addressed in 2017. Specifically, the Treasury (IRS) issued proposed regulations in 2016 that would eliminate or curtail discounting assets passing to family members for estate and gift tax purposes. Market and minority discounts have been a cornerstone of advanced estate tax planning for at least the 30 years during which I have done estate planning.
These proposed regulations were the major initiative by the IRS to finally eliminate this tax transfer strategy, and the odds initially were that the regulations would become effective if not 12/31/16, at least in 2017. However, with President Trump, and a public hearing that occurred on December 1, 2016 (as reported by Forbes, before the largest crowd ever to attend a Treasury public hearing), the implementation of the proposed regulations is becoming less certain.
These two uncertainties – 1) no estate tax or 2) estate tax but no more discounting – represent a return to 2012 and prior years, when it was challenging to plan. (Income tax rates and basis step-up upon death are additional factors contributing to the uncertainty, but enough for now.)