Some of the top life insurance planners are already thinking about a possible future threat: a return of the U.S. estate tax.
Howard Sharfman, a senior managing director at NFP, talked about estate tax boomerang worries last week in Los Angeles, at the Million Dollar Round Table (MDRT) annual meeting.
The topic came up as Sharfman was offering top life insurance salespeople ideas about what to try next.
Sharfman argued that one important idea is protecting clients against believing that the current dormant state of the U.S. federal estate tax is permanent.
“In the past 100 years, there has been one year without an estate tax,” Sharfman said, according to written version of his remarks provided by MDRT. “Our clients don’t play Russian roulette with a 1 in 100 bet.”
The estate tax exclusion amount has been $5 million, with adjustments for inflation, for individuals, and $10 million, with adjustments for inflation, for couples.
The sweeping tax overhaul passed in 2017 doubled the estate tax exclusion to $11.18 million per individual from now through 2025, and to $22.36 million per married couple.
Few life insurance agents have any clients who will hit the $5 million estate value limit, let alone $22.36 million.
4 Reasons to Stay Flexible
Sharfman argued that financial professionals and their clients should recognize that the estate tax could still come roaring back.