What Donald Trump's Estate Legal Plan Might Look Like

Ever wondered how Donald Trump will leave his estate? In this post we will give you some insight as to what the components of Donald Trump's estate plan will look like.

While much of what is written about Donald Trump is political, this post addresses common sense estate planning legal strategies that Donald Trump (or others like him) could implement to protect the estate.

Circumstances that will impact the implementation of an estate legal program for Donald Trump include that he's wealthy, and he's been married three times with five kids from the three wives. His wife is 24 years younger than he is. His wife has tens of millions of dollars of wealth of her own. Some of his kids are adults; one is a young adult; and one is a minor. I assume his goals include keeping his estate in the family while avoiding estate tax and other government interference. He likely has a pre-nup with his current wife.

While a drop in the bucket, Donald Trump will likely take advantage of annual gifting, making gifts of $15,000 (the present annual exclusion amount) to his five children and nine grandchildren. He will likely get his wife to consent to gift-splitting which, in effect will allow him to donate $30,000 to as many people as he wants - each year. Thus, each year, he can get $420,000 out of his estate and avoiding the future 40% estate tax that would have been paid on that value when he dies.

He will also likely pay the medicaid and educational expenses for his kids and grandkids. With his young children and grandchildren in the finest private schools, this would be another strategy to keep wealth in the younger generations.

A discussion what be necessary as to "What to donate?" He could donate cash or he could donate interests in real estate. Donations of interests in his real estate entities would be difficult to value.

I'm sure Donald Trump has powers of attorney in place to allow trusted people to make decisions for him if he is incapable. He may designate different "Agents" to make business decisions versus medical related decisions.

Any discussion regarding what happens to Donald Trump's estate must include a discussion about the federal estate tax. With a $3+ billion estate, and a 40% federal estate tax, the potential estate tax bill is enormous.

Donald Trump could give the estate tax exclusion amount ($11.4 million) to his kids (either outright or in trust), but he would want the remainder of his estate to qualify for either the federal estate tax marital deduction or the federal estate tax charitable deduction.

In general, a married person can leave their estate to their spouse and avoid estate tax upon the death of the first spouse. The concept is that married couples can arrange their estate legal affairs so that the federal estate tax is due after the surviving spouse dies. And since the First Lady is 24 years younger than Donald Trump, this could defer tax for decades.

But Donald Trump is not likely to want to leave his billions outright to his wife because, if he does, she may leave it all to her one child or to her future husband (if she has one). So, Donald Trump will leave his billions to a trust for his wife and children. His wife will be entitled to the income from the "QTIP Trust" for her lifetime, and then when she dies, the trust assets will revert to Donald Trump's heirs, presumably his five children, either outright or perhaps remaining in trust for certain children.

Donald Trump may also leave assets to charity to avoid the estate tax because assets left to charity avoid estate tax. While many wealthy billionaires have pledged to leave their fortunes to charity, my guess is that Donald Trump will want to do everything he can to keep his wealth "in the family."

A discussion is also necessary whether Donald Trump would want to make these bequests through his last will and testament (which requires a court-supervised probate when he dies), or whether he would create a revocable living trust to make these bequests, side-stepping the lengthy, expensive, and public probate system.

This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.

Paul Rabalais

Louisiana Estate Planning Attorney


Phone: (225) 329-2450