Historical context: This article originally discussed Senator Bernie Sanders’s 2021 proposal, the For the 99.5 Percent Act, introduced as S. 994 on March 25, 2021. The figures and proposals below describe that bill, not the law governing an estate today.
What did the 2021 proposal seek to change?
The bill proposed a $3.5 million individual estate-tax basic exclusion and a separate $1 million lifetime gift-tax exclusion. It also proposed graduated transfer-tax rates, with marginal rates of 45, 50, 55 and 65 percent at specified thresholds above $3.5 million. Those were marginal rates, not a single rate applied to every dollar of an estate.
Other provisions addressed certain grantor trusts, valuation discounts, long-term trusts and annual-exclusion gifts. The bill’s treatment of a particular trust or transfer would have depended on the proposed provision, its effective date and the arrangement’s details. The original article’s broad description of all grantor-trust assets and distributions was therefore too sweeping.
The proposed $3.5 million basic exclusion was stated as a fixed amount in the introduced text. It should not have been described as automatically continuing the existing inflation adjustment. The proposal’s scheduled effective dates also did not make those changes law.
What is the current planning context?
For 2026, the federal basic estate-and-gift-tax exclusion is $15 million per individual under current law. The amount available in an individual case can be affected by prior taxable gifts and, where properly elected and applicable, a deceased spouse’s unused exclusion. This is a different framework from the 2021 proposal.
Federal estate tax is only one part of planning. State taxes, income-tax basis, liquidity, business succession and the needs of beneficiaries can matter even when a federal estate-tax payment is not expected. A revocable trust, by itself, does not remove property from its creator’s taxable estate.
How should a family respond to proposed legislation?
A proposal is a reason to understand the options and monitor developments. It is not, by itself, a reason to make a rushed, irreversible gift. Consider how a transfer would affect access to assets, future care, family relationships and income taxes even if the proposed law never takes effect.
We help clients evaluate estate-planning choices in the context of their family and current law, coordinating with tax advisers where appropriate. Historical proposals can offer useful perspective, provided they are clearly distinguished from enacted rules.
Sources: Introduced text of S. 994, 117th Congress; Current federal estate-tax guidance.
Updated October 26, 2026.