On June 7, 2021, Lawrence Mandelker was quoted in Business Insider on the uptick in work for estate attorneys since the onset of the COVID-19 pandemic. According to the article, work for many lawyers dried up at the outset of the pandemic in March 2020, as mergers and acquisitions came to a halt and courts closed. But for trust and estate attorneys, it never really slowed down.
"Last March, we were faced with people who weren't worried about how much they could save on taxes as much as whether they could die tomorrow," said Mandelker. Clients in their 40s and 50s were suddenly rushing to change their wills and advance directives, terrified of catching COVID-19 and needing a ventilator.
By late summer, clients had shifted their attention to the upcoming election and prospect of a blue wave. The Georgia runoffs in January gave Democrats a functional majority in the Senate, making it much more likely that tax hikes could happen. Now there are several legislative proposals that are keeping moneyed Americans and their lawyers up at night.
Biden's American Families Plan would likely be the most devastating to the wealthy. It would eliminate step-up in basis, a loophole that would severely affect how inheritance could be taxed. In short, capital-gains tax would be applied to an inherited asset, such as a house or car, depending on how much the value increased since the deceased person bought it, if it appreciated more than $1 million. Those affected would also have to pay this capital-gains tax upon the person's death even if they don't sell the asset, which is a fundamental change in the tax code.