During the 2024 presidential campaign, Vice President Harris — building on a proposal long championed by Senator Elizabeth Warren — signaled support for a major rewrite of the federal estate and gift tax. The vehicle is the American Housing and Economic Mobility Act of 2024 (AHEMA). Although the proposal did not become law, the ideas in it represent a recurring theme in Democratic tax policy and could resurface in any future administration. If you are doing high-net-worth estate planning, it is worth understanding what was on the table.

What AHEMA would change.

The proposal targets the federal estate, gift, and generation-skipping transfer (GST) taxes that fall on the largest U.S. estates. Highlights:

  • Estate tax exemption cut from $13.61M to $3.5M. Today, a single person can pass roughly $13.61 million estate-tax-free; a married couple, roughly $27.22 million. AHEMA would drop the per-person exemption to $3.5 million ($7M per couple). Far more families would face an estate tax.
  • Lifetime gift exemption cut from $13.61M to $1M. The lifetime gifting exemption would shrink dramatically, sharply limiting the “use it or lose it” gifting most planners use today.
  • Annual exclusion cut from $18,000 to $10,000. The annual gift you can make to any number of recipients without using exemption would shrink, and a per-donor cap of $20,000 would be introduced (so high-net-worth donors who currently gift to dozens of grandchildren and great-grandchildren would no longer be able to).
  • Tiered, higher rates. Today the federal estate tax tops out at 40%. AHEMA proposes graduated rates: 55% on the first tranche of taxable estate, 60% on a middle band, and 65% over $1 billion. There would also be a surtax on estates over $1 billion.

Why it matters even though it didn’t pass.

For three reasons. First, the current federal exemption ($13.61M / $27.22M for couples) is itself a temporary product of the 2017 Tax Cuts and Jobs Act. Under current law it is scheduled to sunset at the end of 2025, reverting to roughly half of today’s level (about $7M per person, indexed) absent further legislation. Even without AHEMA, exemptions are likely to fall.

Second, large policy ideas like AHEMA rarely die quietly. They become the “ready draft” the next time a Democratic Congress and White House align. Families with significant wealth who would be exposed to a $3.5M exemption should at least know the shape of the proposal that has been written.

Third — and most important — if you have a will or revocable trust that was drafted to fit the current $13.61M exemption, a sharp drop in the exemption could materially change how it works. Estate plans go stale, sometimes overnight, when tax law shifts.

What clients should consider now.

For families with estates well below the proposed $3.5M cutoff, the answer is largely: nothing changes. The exemption issues at the federal level don’t reach you. Focus on the non-tax parts of your plan — fiduciary selections, beneficiary designations, and ancillary documents.

For families above $3.5M, the story is different. With the TCJA exemption already scheduled to sunset, and proposals like AHEMA in the policy bloodstream, the next several years are an unusually rich window for proactive planning — lifetime gifting, irrevocable trusts, GRATs, sales to defective grantor trusts, and similar techniques. The mechanics are case-specific, but the planning question is universal: are you using a generationally generous exemption that may not be there forever?

State estate taxes are a separate issue. New York imposes its own estate tax with a much lower exemption than the federal level (about $7.16M in 2025) and a steep “cliff” that can pull an entire estate into tax if it exceeds the exemption by more than 5%. AHEMA wouldn’t change New York’s rules, but plenty of New Yorkers face state-level exposure even when federal isn’t in play.

Quick FAQ.

Was AHEMA passed? No. The proposal was reintroduced during the 2024 campaign and has not been enacted. It remains a proposal.

Will the federal estate tax exemption actually fall? The TCJA exemption is currently scheduled to sunset at the end of 2025 absent congressional action. So — barring new legislation — yes, the exemption will fall, just not as far as AHEMA proposed.

I have a sub-$3.5M estate. Should I worry? Probably not, at least about the federal estate tax. The non-tax pieces of your plan still matter: guardian and fiduciary nominations, where the original will lives, and the documents that protect you while you’re alive.

I’m above the proposed $3.5M cutoff. What should I do? Talk to counsel. The current exemption is unusually generous and unlikely to last. Schedule a consultation and we’ll walk through your options.