Currently, the gift and estate tax threshold is $5.5MM per person ($11MM per married couple). Assets passing at death that are above that threshold are taxed at 40%. Gifts made during lifetime that are above this threshold are also taxed at 40%.
Less than 1 out of 550 of people who die have taxable estates. Furthermore, smart lawyers help rich clients avoid the estate tax (there are multiple methods that are available to reduce your taxable estate). As Gary Cohn (former President of Goldman Sachs) recently noted “Only stupid people pay estate tax”. He was referring to various planning strategies that are available to those who ask.
Now, Trump is planning to eliminate this tax. The vast majority of people will not be affected. On the other hand, lots of wealthy clients will use this opportunity (which will likely be short lived – if in 3 years a Democratic President gets elected and changes the law again) to transfer their wealth to irrevocable trusts and other vehicles without any resulting taxes.
Bottom line: if your estate is greater than $5.5MM, this will not affect you.