Alabama’s U.S. Senators have taken a firm stance on federal estate tax policy, joining efforts to eliminate what critics often call the “death tax.” This development could have significant implications for estate planning in Alabama, particularly for family businesses and farms.
Alabama Senators Lead Charge Against Estate Tax
U.S. Senators Tommy Tuberville and Katie Britt, both Republicans representing Alabama, have joined Senate Majority Leader John Thune (R-SD) in reintroducing legislation aimed at permanently repealing the federal estate tax. The proposed “Death Tax Repeal Act” would completely eliminate the federal tax currently levied on the transfer of personal property to inheritors after death.
Senator Tuberville expressed strong opposition to the existing tax structure in an official statement: “The Death Tax destroys American jobs by stifling profitable businesses that employ hardworking Americans.
Our government should be focused on creating an economic environment that preserves small businesses and family farms, instead of taxing them out of operation. I will keep pushing for policies that incentivize our next generation of farmers and business owners, so that we can continue to rely on their contributions for a strong economy.”
Senator Britt echoed this sentiment, describing the estate tax as “a form of double taxation” and emphasizing its impact on agricultural interests. “The Death Tax unjustly forces the next generation of farm families to decide between bankruptcy or selling their farm to a corporation. No American farm family, already suffering from the loss of their loved one, should be faced with this devastating choice,” Britt stated.
She further emphasized the importance of protecting Alabama’s agricultural sector: “Repealing the Death Tax safeguards Alabama’s incredible farmers and cattlemen who work tirelessly throughout their lives to feed and clothe our state, nation, and world. I will continue to fight to protect the ability of Alabama farmers, cattlemen, and small business owners to live the American Dream and pass on their family’s legacy and livelihood to their children.”
Understanding the Current Estate Tax
The federal estate tax has long been a subject of debate among policymakers, economists, and tax experts. While opponents characterize it as an unfair “death tax,” proponents argue it serves as an important tool for reducing wealth inequality.
According to data from the Institute of Taxation and Economic Policy, the estate tax applies to a very small percentage of Americans – in fact, over 99 percent of households never pay this tax. In 2019, “only 8 of every 10,000 people who died left an estate large enough to trigger the tax.”
The tax is designed to be progressive, applying only to estates of significant value. For 2025, the federal estate tax exemption stands at approximately $13.61 million per individual (adjusted annually for inflation), meaning estates valued below this threshold face no federal estate tax liability. Married couples can effectively double this exemption through proper estate planning.
Additionally, existing tax code includes special provisions designed specifically to protect family-owned businesses and farms. These provisions have been largely effective – according to available data, less than 1 percent of farm estates owed any federal estate taxes in 2020.
Perspectives on the Proposed Repeal
Proponents of maintaining the estate tax, including the Brookings Institute, argue that “The alleged negatives of the tax—its effects on saving, small businesses and farms, and its high compliance costs—are often grossly overstated. The hysteria in labeling it the ‘death tax’ is also misplaced.
About 98 percent of deaths result in no estate taxes, its one-time burden at the time of death can be reduced with prudent estate planning devices such as life insurance and the tax is imposed on wealth, not on death itself.”
Supporters of the tax maintain that it provides important incentives for charitable giving, helps close tax loopholes related to capital gains, and prevents the concentration of extreme wealth in a small number of families across generations.
Implications for Alabama Estate Planning
For Alabama residents engaged in estate planning, this proposed legislation warrants attention.
While the vast majority of Alabamians have estates that fall well below the current federal exemption threshold, those with significant assets—particularly family businesses, farms, or substantial investments—may want to monitor the progress of this legislation.
It’s important to note that even if the federal estate tax were eliminated, proper estate planning would remain essential.
Other considerations including:
- Alabama state inheritance laws;
- Asset protection;
- Business succession planning;
- Powers of attorney and advance healthcare directives;
- Trust creation and management; and
- Probate avoidance strategies.
Regardless of federal tax policy changes, comprehensive estate planning ensures that your wishes are honored, your loved ones are protected, and your legacy is preserved according to your intentions.
The Legislative Road Ahead
The Death Tax Repeal Act faces a complex legislative journey. Similar proposals have been introduced in previous sessions of Congress without becoming law. The current political landscape, including divided government and competing fiscal priorities, makes the bill’s prospects uncertain.
For Alabama residents concerned about estate tax implications, working with qualified estate planning attorneys remains the most prudent approach to navigating this evolving landscape. Professional guidance can help ensure your estate plan remains optimized regardless of potential changes to federal tax policy.
Securing Your Legacy: Estate Planning in Alabama
While federal legislation debates continue, Alabama residents shouldn’t wait to establish or update their estate plans.
Whether you’re a farmer concerned about passing agricultural assets to the next generation, a small business owner planning for succession, or simply want to ensure your family is protected, proactive estate planning is essential.
The experienced estate planning attorneys at Baxley Maniscalco understand the complex interplay between state and federal laws affecting your legacy. We work closely with clients to develop customized estate plans that protect assets, minimize tax burdens, and ensure your wishes are carried out.
Contact Baxley Maniscalco for Estate Planning Guidance
If you have questions about how current or proposed estate tax laws might affect your family’s future, the estate planning team at Baxley Maniscalco is here to help.
Our attorneys stay current on legislative developments and can help you navigate the complexities of estate planning with confidence.
Schedule a Consultation Today or call us at (256) 770-7232 to discuss your estate planning needs with our knowledgeable legal team.
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