Why is Estate Planning More Important Now Than Ever Before? You should get started before it's too late.

By Tom Wheelwright

Opinions expressed by Entrepreneur contributors are their own.

President Biden's Build Back Better plan has an abundance of tax changes that, if implemented, could significantly decrease the amount of wealth that you can leave to your family. These potential changes along with the fact that October is National Estate Planning Awareness Month, are a great reason to begin reevaluating your estate planning now before it's too late.

Related: How To Prepare For Biden's Tax Proposals

What's at stake?

So, why is estate planning so critical at this moment? Biden has proposed that the estate and gift tax exemption essentially be cut in half. Currently, the exclusion is $11.7 million, meaning that if your estate is under that amount, you won't owe pay the estate and gift tax and anything over that amount will be taxed at 40%. If the new proposal is passed, the exemption would be lowered to $5 million with the tax being implemented on all deaths and transfers after December 31, 2021.

What can be done to protect your assets?

Estate planning is a key part of asset protection as there are quite a few ways to legally reduce your estate and income taxes. A great tax advisor will take the time to understand you, your business and your relationship with your family to create an effective tax strategy. What many people don't realize is that your family can play a large role in the tax strategy as assets can be passed to children prior to death, which can eliminate taxes.

Why start now?

Creating a strategic estate plan that reduces the impact of Biden's new proposal will take time. Rather than working on your tax plan and estate plan separately, it's extremely important to combine the two as one heavily influences the other. This means in addition to scheduling time with your tax advisor, you'll also need to coordinate with your family attorney to ensure the changes are all documented legally. The December 31 deadline is quickly approaching, and many skilled attorneys and advisors are already booked through the end of the year. If you want your planning to be effective and implemented correctly, you can't afford to push off this planning any longer.

Related: The Pandora Papers Reveals Where the Richest People in the World Are Hiding Their Money

As the saying goes, death and taxes are the only things certain in life. If you've worked hard to create an estate that can be built upon for generations to come, estate planning is the only way to ensure that your assets won't be dramatically reduced by taxes. Take the time to plan and implement legal strategies that can reduce or eliminate your taxes before this proposal is passed into law.

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Tom Wheelwright

Entrepreneur Leadership Network Contributor

CPA, Author and Founder and CEO of WealthAbility

Tom Wheelwright is a leading tax and wealth expert, CPA and author of "Tax-Free Wealth." As the CEO of WealthAbility®, Wheelwright helps entrepreneurs and investors build wealth through practical strategies that permanently reduce taxes.

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