Authored by; Cole Hickman and Samuel Landman
In late March 2026, Senator Chris Van Hollen (D‑MD) reintroduced legislation aimed at strengthening the Social Security system by increasing federal estate and gift tax revenue. The bill, titled the Strengthen Social Security by Taxing Dynastic Wealth Act, would reverse many of the estate tax cuts enacted over the last several years and restore transfer tax rules to their 2009 levels.
What Would the Proposal Do
If enacted, the legislation would:
- Reduce the federal estate tax exemption to $3.5 million per individual (and $7 million for married couples), down from today’s historically high levels
- Limit the lifetime gift tax exemption to $1 million per individual
- Increase the top estate and gift tax rate from 40% to 45%
- Retain the generation‑skipping transfer tax as a backstop against multi‑generational wealth transfers
How This Is Connected to Social Security
What distinguishes this proposal from prior estate tax reforms is its funding mechanism. All revenue generated by these changes would be deposited directly into a Social Security Trust Fund. According to Senator Van Hollen, the goal is to improve Social Security’s long‑term solvency by taxing very large inheritances.
What This Means for High‑Net‑Worth Families
While the bill is unlikely to be enacted, it provides a meaningful signal of where future estate tax policy could head, especially if Democrats control Congress. Reductions in exemptions of this magnitude subjects substantially more families to the federal estate tax system. This would change gifting, trust, insurance, and philanthropic planning strategies.
The key takeaway is not that change is imminent—but that periods of historically favorable tax law rarely last indefinitely. Families with estates above 3.5 million may want to revisit existing plans to ensure flexibility and preparedness should Congress move to reduce the exemption amount.
If you have any questions on the information above, please contact Cole Hickman at hickman@hjlawfirm.com or Samuel Landman at slandman@hjlawfirm.com
