Policy Perspectives - Practice Insights

Below are practice insights provided by Steptoe's bipartisan team of lawyers and government affairs advisors during the early days of President Donald Trump's second term. As of April 13, 2025, the content on this page is no longer being updated.

For active links to our Executive Order Tracker, as well as our current client alerts, publications, and events that continue to examine the impact of the administration on businesses and regulation, please visit our main Policy Perspectives page: Examining Trump Administration Impacts on Regulation, Investigations, Tax & Trade.

President Trump and administration officials are making a concerted effort to cut federal spending in 2025, beginning with discretionary programs. While Congress has increased funding for many discretionary programs in recent years, we can expect the Trump administration to propose substantial cuts to current spending levels and pursue the rescission of unobligated federal funding.

While Congress holds the decision-making authority and appropriates funds, congressional Republicans will be interested in scaling back discretionary spending in exchange for a debt ceiling increase in 2025. Congress is also working on a new tax bill, which will require "revenue offsets." Many areas will be ripe for cuts, including unauthorized spending (which accounts for a third of federal discretionary spending), and have already been targeted by the new Department of Government Efficiency (DOGE). The administration will propose larger cuts than we anticipate passing Congress. Ultimately, Republicans will still need to work with Democrats to overcome the filibuster in the Senate to enact the annual appropriations bills.

What we could see from the new administration:

Cost-cutting and government efficiency measures will be implemented, with recommendations from DOGE.
Non-defense discretionary programs will likely see sizeable cuts.
Reconciliation bills will deeply change the spending landscape.

Nominees for office:

Office of Management and Budget (OMB) - Russell Vought has been confirmed as Director of OMB. Mr. Vought previously served as OMB Director for part of President Trump’s first term and will play a key role in the development and execution of Trump’s budgetary agenda, including working seamlessly with DOGE. Mr. Vought ruffled feathers in Trump's first term with his approach to no-compromise spending deals and is expected to implement spending cuts in this new term.
Department of Government Efficiency (DOGE) - Elon Musk is the chair of DOGE. Although not an official government agency, DOGE focuses on a litany of cost-saving measures, including identifying federal programs to be reduced or eliminated.

How we can help:

We can help insulate client priorities by educating key appropriators and OMB on their importance.
Outside of traditional funding opportunities, appropriations creates significant opportunities for clients to engage at the federal level, including through
- Budget hearings
- Letters to agencies
- Report language that directs agency action or clarifies congressional intent
Not only should clients think about playing "defense" in funding debates, but there will be many opportunities that arise for clients in streamlining measures. Engaging ahead of these discussions is imperative, and having knowledge of what's coming is of even greater importance than before.

The Trump administration has taken a different approach compared to the Biden administration by focusing on removing impediments to rapid AI development in lieu of emphasizing safeguards for inappropriate uses of AI, such as those that could result in employment discrimination or violate individual privacy. However, the Trump administration has also been aligned with its predecessor in expanding export and other trade controls for AI, citing national security-related concerns, and emphasizing the need for the United States to maintain a lead over foreign competitors. Although the Trump administration’s policies are still being formulated, it may seek to regulate uses of AI that are perceived to limit speech in the United States or discriminate against individuals based on their political beliefs, such as in content moderation.

What we have seen and could see from the new administration:

The new administration rescinded Executive Order 14110 on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. Some frameworks established under the order will likely continue in other forms and many elements of the national security memorandum on use of AI in national security systems may live on. However, the government-wide approach to regulating AI to address concerns about safety and individual rights is likely on its way out, opening the door for companies to adopt and develop AI in a more open regulatory environment.
The new administration has sidelined and may ultimately wind down the S. Artificial Intelligence Safety Institute, although its Testing Risks of AI for National Security Taskforce may continue in another form. Although the new administration may continue to seek voluntary commitments from AI developers to allow for government evaluations of models from a national security perspective, these evaluations may be less centralized and focus on discrete issues such as deepfakes and political bias, in addition to national security.
The new administration may provide financial assistance or procurement contracts for large data center buildouts and power supplies in the United States and continue to invest in US-based semiconductor fabs and supply chains, particularly under Title III of the Defense Production Act. Although the new administration has implemented various freezes on financial assistance, expanding data centers and power supply in the United States remains an important issue and could continue to benefit from federal funding after initial funding freezes get resolved. The U.S.-China Economic and Security Review Commission recently endorsed a Manhattan Project-like program to significantly advance AI development in the United States, corresponding to ongoing initiatives to expand domestic semiconductor manufacturing. The new administration may ultimately push ahead with these types of domestic infrastructure investments.
The new administration may take executive action to govern use of AI in content moderation, with a potential emphasis on changing government standards that are currently in development for detecting model bias and deepfakes. Although the new administration can generally be expected to limit regulatory impediments to rapid AI adoption, it will likely continue to be concerned about uses of AI that result in perceived limitations on speech or political bias.
The new administration will likely continue to expand export and outbound investment controls relating to AI, as well as limitations on where data can be housed and who can use data to train AI models. The new administration can be expected to prioritize US development of advanced AI. However, it may also be more amenable to open-source development of certain AI capabilities, particularly following a recent congressional bipartisan report that identified the benefits of open-source models, which Steptoe summarized here.

Appointments:

David Sacks is serving as the White House AI and Cryptocurrency Czar and Chair of the President’s Council of Advisors on Science and Technology. In December 2024, it was reported that his role will likely be advisory instead of a full-time government position. However, Sacks will likely be similar to other expected appointees in favoring minimal regulation on AI development, except with respect to specific transactions or applications, such as to address national security concerns.
Sriram Kirshnan is serving as the senior policy advisor for AI at the White House Office of Science and Technology Policy. Kirshnan will also likely favor rapid AI development, as well as fair use stances on training AI models in the United States over alternative restrictive licensing frameworks promoted by content owners and publishers.
Elon Musk will likely continue to play a significant unofficial role in advising on AI policy, with JD Vance expected to weigh in on specific issues, such as encouraging use of open-source AI models to promote competition in the tech sector. Both are expected to lean toward minimizing regulation and promoting open-source AI, but Musk may push for more safety-oriented controls compared to others in the administration.

How we can help:

Helping AI companies shape AI legislation through engagement with members of Congress, who generally are not technology experts. Congress can be expected to be more active in addressing AI issues in response to reduced executive regulation.
Assisting with negotiating and implementing US government funding agreements for AI development and infrastructure enhancements, including under Title III of the Defense Production Act in addition to other authorities.
Advising on regulatory and state law issues arising in data center buildouts.
Monitoring, shaping, and, if necessary, challenging state-by-state regulation of AI, which will likely expand in the absence of comprehensive federal frameworks.
Developing regulatory compliance and governance programs on uses of AI that anticipate and track developments throughout the new administration.
Advising on AI enforcement actions and risks, particularly with respect to cross-border conflicts between regulation of AI in the United States and in other jurisdictions like the United Kingdom and European Union.
Representing companies on intellectual property infringement risks and litigation relating to AI training and operation.
Advising on national security and privacy risks associated with the use of AI, particularly with respect to US trade controls, data sets, controlled unclassified information, classified information, and open-source models.
Guiding AI companies on data privacy and security compliance, including GDPR, CCPA, and HIPAA, to ensure responsible AI development and deployment.
Assisting AI companies in navigating antitrust and competition laws, particularly in relation to AI-driven mergers and acquisitions, collaborations, and innovation.

We anticipate key banking agency policy changes given new and emerging leadership dynamics. At this time, leadership changes at the Federal Reserve (Fed) are not straightforward. But change at the top can come immediately at the Office of the Comptroller of the Currency (OCC) and change has already occurred at the Federal Deposit Insurance Corporation (FDIC).

Leadership changes as outlined below would result in an almost immediate Trump-appointed majority on the Financial Stability Oversight Council (FSOC), the interagency body made up of the heads of the federal financial regulators and an independent insurance expert, with several state financial regulators and others as non-voting members. FSOC could quickly change policies finalized under the Biden Administration, like its analytic framework for financial stability risks and updated guidance on the nonbank financial company (NBFI) determinations process. FSOC could also seek to streamline regulations.

What we could see from the new administration:

Policy

Exams may become more transparent and less invasive.
Basel III Endgame re-proposal will likely be delayed, at a minimum, due to the need to negotiate with new Trump appointees at the OCC, CFPB and possibly FDIC; if it is re-proposed, it will provide relief to industry in line with prior industry feedback.
The G-SIB surcharge modification proposal may, however, be re-proposed as the Fed can do so unilaterally while Powell and Barr remain on the Board.
The expansion of long-term debt requirements to institutions over $100 billion in assets may be modified but likely will remain in place as this issue has enjoyed bipartisan support.
Heightened resolution planning expectations for banks, including those over $50 billion in assets, is another issue with bipartisan support that is likely to remain.
Modernization of the Community Reinvestment Act will likely remain tied up in courts and if overturned there, faces a lengthy and extensive re-negotiation.
The OCC and FDIC likely will revise merger approval policies in line with Republican and industry critiques of frameworks proposed in September 2024.
The OCC will likely take a more inclusive approach to fintech and digital assets, and likely will be more open to issuing new charters to fintechs and banks dedicated to crypto companies, although state regulators may resist such changes.
As noted in our analysis of changes to blockchain policy, a reversal of perceived de-banking of the crypto industry may occur, and changes such as repeal of Staff Accounting Bulletin No. 121 will ease burdens on financial institutions.

Leadership

Fed Chair Jerome Powell’s term extends until May 2026. Michael Barr’s term as Vice Chair for Supervision terminates voluntarily at the end of February 2025 and his term as a Fed Governor could last until 2032. It’s unclear who Trump will appoint to replace Barr, but a likely possibility would be for Trump to appoint another governor, such as Michelle Bowman. Regardless, the Fed’s composition for the next two years is likely to remain largely the same with the agency continuing to operate on consensus.
Trump will have the opportunity to nominate a new FDIC chair and impose Republican control of the FDIC board. In the interim, President Trump has picked Travis Hill to serve as acting head of the FDIC.

Nominees for office:

Treasury Department: Scott Bessent, Secretary (confirmed)
OCC: Jonathan Gould nominated as Comptroller of the Currency; Rodney Hood appointed acting Comptroller
FDIC: Travis Hill appointed FDIC acting chair

How we can help:

Facilitating a dialogue with your examiner-in-charge.
Ensuring continued focus on issues likely to remain priorities, such as long-term debt adjustments, resolution planning, oversight of third-party partners.
Considering opportunities to integrate blockchain, digital assets and crypto into financial institutions.
Helping you attend closely to change management in a dynamic policy environment.

President Trump's administration promises to make a clean break from the Biden administration's hostile regulatory environment for blockchain and cryptocurrency technology. The crypto industry was politically active during the 2024 election, spending more than $119 million to help elect pro-crypto candidates in federal elections. President Trump embraced the industry by adopting crypto-friendly policy positions during the election and asserting his desire to make the United States "the world capital for crypto and Bitcoin." Turning that desire into reality will depend largely on the priorities of President Trump's appointees to lead federal financial regulatory agencies and whether the 119^th Congress can pass market structure and stablecoin legislation assigning clear regulatory authority to the various federal banking and markets regulators.

What we expect from the new administration:

New leadership at the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) that could:
- Halt the agency's current regulation-by-enforcement posture.
- Engage in notice-and-comment rulemaking processes to provide rules for the industry, covering issues such as token launches, secondary trading of crypto assets, lending, and the integration of blockchain technology in traditional securities markets.
- Rescind Staff Accounting Bulletin 121 (SAB 121) and issue new, actionable guidance on a variety of subjects.
New leadership at federal banking regulators that could:
- Rescind and replace guidance that severely limits the abilities of banks to engage in crypto-related activities.
- Eliminate policies that have made it difficult for crypto industry participants to maintain bank accounts.
Adoption of a whole-of-government approach to crypto, which could be implemented either through the appointment of a "crypto czar" or industry advisory council. Coordination among the federal capital markets, banking, and financial regulators could ensure that tax, anti-money laundering, sanctions, securities, and derivatives regulations do not impose inconsistent obligations on the industry.
Facilitating a more prominent role for the CFTC in regulating crypto products, including spot trading of certain digital assets, together with a decreased role of the SEC.
Strong push for adoption of market structure regulation.

Nominees for office:

SEC: Paul Atkins, confirmed as SEC Chair
CFTC: Caroline Pham named Acting Chairman

How we can help:

Engage with new Trump administration leadership to help shape regulatory agenda relating to crypto and have your priorities heard.
Structure new protocols, products, and services in the US and serving US customers.
Register entities with the SEC, CFTC, Financial Crimes Enforcement Network (FinCEN), and other financial regulators.
Structure and negotiate raises, offerings, venture investments, corporate combinations and other investment transactions.
Assess potential regulatory risk for market participants in evolving landscape.
Seek no-action or exemptive relief from federal financial regulators.
Serve as product counsel to guide you through regulatory and commercial issues in connection with the launch of a new protocol, product, or service.
Advocate for your interests in Congress by drafting legislation, and developing and executing engagement strategies.

Food and Drug Administration (FDA)

Robert F. Kennedy Jr. was confirmed as the Secretary of Health and Human Services (HHS) on February 13, 2025. Secretary Kennedy's confirmation vote largely followed party lines in the Senate, with 52 (out of 53) Republican senators voting to confirm Secretary Kennedy, and all 45 Democratic senators (plus two Independent senators and one Republication senator) voting against his confirmation. HHS has oversight of FDA, so Secretary Kennedy will have the opportunity to impact the way that FDA regulates the various goods under its jurisdiction, including drugs, medical devices, cosmetics, food, and food-contact materials. As of February 14, 2025, President Trump’s nominee for Commissioner of FDA, Dr. Marty Makary, has not been confirmed by the Senate. The current acting Commissioner of FDA is Dr. Sara Brenner.

We have the benefit of experience in watching the roll-out and implementation of a previous Trump administration's oversight of HHS and FDA. If history is a guide, then a critical, if not the critical, task is to decipher between campaign trail and other political rhetoric versus what is actually likely to be implemented from a policy perspective.

For example, President Trump did publicly voice skepticism over certain public health recommendations during the COVID-19 pandemic, such as the wearing of masks, in spite of the fact that FDA and the CDC noted, throughout the course of the pandemic, that some face coverings can offer protection from COVID-19. Also of note is that Trump's previous FDA Commissioner, Scott Gottlieb, presided over FDA by taking a relatively light-handed approach to changing the daily workings of the Agency, even though his tenure overlapped with some relatively tumultuous events, given FDA's role in approving vaccines and other critical drugs and medical devices used to treat the virus.

Taking this history into account, it will be important to closely watch developments at FDA to determine the extent changes at FDA will actually reflect some of the rhetoric attributed to Secretary Kennedy. For example, while Mr. Kennedy is known to have previously expressed publicly at least some level of skepticism over vaccines and fluoride treatments of water, more recent rhetoric indicates a potential desire to assuage any fears that major changes are coming. Secretary Kennedy stated on November 6, the day after the election, that he "wouldn't take anybody's vaccines" and that he did not intend to seek a federal ban of fluoride treatment of water, but rather intended to instruct the water districts as to their "legal liability" to protect constituents.

This theme continued during the somewhat contentious Senate confirmation hearings for Secretary Kennedy. For example, when pressed about his views on vaccines, Secretary Kennedy repeatedly stated during his confirmation hearing that he was not "anti-vaccine," and he promised to "not go into HHS and impose my pre-ordained opinions on anybody at HHS. I’m going to empower the scientists at HHS to do their job and make sure that we have good science that’s evidence-based…" Yet Secretary Kennedy also sparred with Senator Sanders (I-VT) over the efficacy of the COVID-19 vaccines. Secretary Kennedy also emphasized during his confirmation hearing that he is not "the enemy of food producers," but he also made the point of attacking the Generally Recognized as Safe (GRAS) exemption to the food additive definition in the Federal Food, Drug and Cosmetic Act. This provision allows for companies that want to use a substance that does not meet the definition of a "food additive" to determine that the substance is safe under its intended conditions of use, without undergoing pre-market review by the Agency. In this regard, Secretary Kennedy stated "we have 10,000 ingredients in our food in this country because FDA employs a standard called the GRAS standard and looks at any new chemical as innocent until proven guilty."

Another relevant factor to consider is that, at least historically, FDA is a science-driven entity, and one that is probably less susceptible than perhaps some other agencies to the political climate of the day. One former FDA Deputy Commissioner – a career employee of the Agency, and not a political appointee – aptly said that it is probably somewhat of a misnomer to think that any presidential administration seeks to (or actually does) politically influence FDA. Rather, a key difference in presidential administrations is the extent to which any given administration seeks to politically interfere with the workings of the Agency. Thus, a key question here is how much political interference Secretary Kennedy and the Trump administration will seek to exert, and to what extent the career staff in the Agency are ultimately distracted by such interference or frustrated by it.

Please contact Steptoe LLP with any questions about the new administration and its impact on FDA.

The second Trump administration will likely lead to significant policy shifts in the regulation of financial markets, international trade, and competition. These policy shifts are expected to bring notable changes in how commercial disputes arise, how they are litigated, and who is litigating them.

Regulation of Financial Markets

The Trump administration’s anticipated permissive approach to the regulation of the financial markets is likely to lead to increased fundraising and merger activity. These increases will invariably lead to more "dissatisfied" investors and purchasers and, thus, more securities and investment disputes. Likewise, we expect that decreases in enforcement activity will lead to private lawsuits or lawsuits from state authorities filling the regulatory "void." With the federal government taking a smaller role in enforcement and proactive rule-making, financial regulation will largely be driven by the outcomes of private lawsuits. We expect this will particularly be the case in areas like cryptocurrency and digital assets where regulation is still catching up to changes in the markets.

International Trade Policy

The possibility of increased tariffs and protectionist policies may disrupt cross-border commercial relationships. Increases in the costs of doing business with foreign suppliers will likely – directly and indirectly – put strain on these commercial relationships leading to disputes. As a result, we expect to see a more aggressive approach to contractual "exit" provisions, including force majeure and act of god clauses. In addition, parties negotiating new agreements may consider including additional protections in their agreements to guard against the effects of sudden, rapid changes in international trade policy.

Regulation of Competition

Under the Biden administration, the Federal Trade Commission, and its chair, Lina Khan, aggressively cracked down on Big Tech and corporate deal making. The FTC also promulgated rules widely viewed by Republicans as anti-business, including a rule prohibiting nearly all non-competes (the "Non-Compete Rule"). Throughout his campaign, Trump made it clear that he plans to reduce the role of federal bureaucrats and regulations across all sectors. And with the announcement of the Department of Governmental Efficiency (DOGE) and Elon Musk's increasing influence in the administration, cuts to regulatory personnel across the board, including within the FTC, are likely. While it is difficult to predict exactly what impact Musk, DOGE, and Trump will have on the FTC, reduced antitrust enforcement across the board seems a safe bet.

What we could see during the new administration:

Rapid changes to international trade regulation including increases in tariffs will put pressure on cross-border commercial relationships.
Favorable market conditions coupled with a more permissive regulatory environment will likely lead to increased capital markets activity and a corresponding increase in securities litigation and investment disputes.
Federal agencies, including the SEC and CFTC, taking a more permissive approach to the regulation of financial markets, cryptocurrency, digital assets, and alternative investment products, leading to more "regulation" through private litigation.
Rollback of ESG reporting requirements and enforcement with private plaintiffs filling the void.
Increased litigation involving state regulators as states like California or New York act aggressively to fill regulatory gaps left by the Trump administration’s roll back of environmental, financial, and health and safety legislation.
Eased antitrust enforcement and increased deal-making. Trump's FTC will likely be more receptive to mergers and favor targeted interventions and solutions rather than shutting down deals entirely. As a result, the market could see increased deal flow in the coming year.
Resolution of Big Tech antitrust matters. While it is unlikely that cases against tech giants like Facebook will be abandoned – the first Trump administration cracked down on Google and Facebook, and Big Tech remains a populist concern – Trump's second term may present an opportunity to settle these matters with tailored solutions. And the market may benefit from increased stability once enforcement actions against some of its largest players are resolved.
Demise of the Non-Compete Rule (and potentially other rules). Two courts have already decided against this rule, including a nationwide injunction prohibiting enforcement. The FTC has appealed these decisions, but the Trump administration could abandon these appeals and accept the lower court decisions invalidating the rule.
- Additionally, new Republican majorities at the FTC¹ and in Congress² would give Republicans the power to: (a) repeal or amend Biden-era rules by vote of the FTC commissioners or (b) nullify them through legislation restricting Congress' delegation of rulemaking authority to the FTC.
Eased antitrust enforcement and elimination of the Non-Compete Rule are both likely to spur increased commercial litigation:
- More deal-making likely means more disputes related to those deals.
- Invalidation of the Non-Compete Rule means that a valuable business tool is available, but increased use of non-competes will also lead to increased litigation regarding their scope and enforceability.
Stricter regulation of litigation financing could lead to consolidation in the space, increasing costs for plaintiffs seeking third-party assistance in prosecuting lawsuits and potentially benefiting large plaintiffs' firms that work on contingency.
Rapid appointment of judges throughout the federal judiciary.

Nominees for Offices:

SEC Chair: Paul Atkins has been confirmed as SEC Chair
CFTC Chair: Caroline Pham was named as Acting CFTC Chair. While regulation of cryptocurrency was undertaken by both the SEC and CFTC under the Biden administration, we could see it de-emphasized under both agencies under a second Trump administration – leading to potential increases in lawsuits from state regulators and private plaintiffs.
US Attorney, SDNY: The anticipated appointment of former SEC Chair Jay Clayton could mean that enforcement priorities traditionally undertaken by the SEC could shit to federal prosecutors. As SEC Chair, Clayton presided over a fairly active Enforcement Division with particular emphasis on regulatory actions concerning securities offerings (including crypto offerings). As an already active regulator of securities offerings, we could see even more criminal and civil investigations from federal prosecutors in Manhattan in matters that would previously been investigated by the SEC and CFTC.
FTC Chair: Trump named Andrew Ferguson, former chief counsel to Republican Senator Mitch McConnell, as FTC Chair.

How we can help

Synthesize developments in case law and monitor trends in private litigation to assist companies facing regulatory uncertainty in the securities markets, especially in areas with minimal and/or rapidly changing regulatory guidance (e.g., cryptocurrency, digital assets, and ESG).
Assist businesses hoping to taking advantage of the deal-making environment by reviewing draft agreements and identifying ways to mitigate litigation risk and optimize litigation position should a dispute arise.
Assist clients with proactive advice regarding commercial relationships that will be strained by increased tariffs. We can review commercial agreements, advise on litigation exposure, and provide guidance in mediating disputes with suppliers before they lead to litigation.
Advise international start-ups and other growing companies on the impact of the second Trump administration on US expansion plans.
Review and draft proposed non-competition agreements to ensure they are enforceable in the relevant jurisdictions and to reduce litigation risk.
Once a dispute arises, help businesses to resolve the dispute short of litigation while also laying the groundwork for successful litigation strategy.
Assist businesses in asserting or defending their contractual rights through litigation when complex disputes arise.

¹ With the appointment of a new FTC chair, three of the five Commissioners will be Republicans. The two Republicans on the Commission voted against the Non-Compete Rule.

² The U.S. House Committee on Oversight and Accountability recently released a Staff Report critical of Chair Lina Khan and the non-compete rule. See https://oversight.house.gov/wp-content/uploads/2024/10/HCOA-Majority-Staff-Report-FTC-Investigation.pdf.

President Trump will exert significant influence over the direction of congressional investigations in the 119^thCongress. With the Republicans maintaining the House of Representatives, and winning control of the Senate, we expect a primary focus to be on traditional GOP targets. While there will be some bipartisan investigations on various topics, the power of the gavels will be used to further GOP goals, messaging, and legislative activity.

What we could see from the new Congress:

A focus on those individuals and entities that have been mentioned as part of President Trump's "revenge" or "retribution."
Antitrust investigations that may parallel those from DOJ and FTC, including social media and "Big Tech," and the legacy media.
A continued focus on universities and their handling of the response to October 7.
Attacks on DEI and ESG programs throughout various industries, including higher education.
Investigations into the use of funds received by entities as part of the Investment Reduction Act.
Bipartisan heightened rhetoric directed towards companies that have connections to China.

How we can help:

Respond to inquiries from members of Congress, whether they are formal committee investigations or letters from individual members.
Prepare for hearings and witness testimony in front of the various committees.
Counsel on the priorities and strategy of key committee chairs and ranking members.
Engage in proactive outreach on both sides of the aisle to educate lawmakers about your company and industry.
Guide legal departments and government affairs professionals through the labyrinth of congressional procedure that determine the rules of the game.

During both President Trump's first term and President Biden’s term, economic sanctions were actively employed as a primary tool of national security policy. The first Trump administration actively used sanctions to target Iran, Venezuela, North Korea, and their supporters, among others. The Biden administration’s expansive sanctions against Russia rapidly transformed the financial networks and global supply chains that connected the US, Europe, and Russia. Although the breakneck pace of sanctions may slow in the early days of President Trump’s second term, we expect the new administration to actively employ—and, in some cases, scale back—sanctions in furtherance of President Trump’s foreign policy objectives.

Important Sanctions Programs

Russia

President Trump has repeatedly expressed his intent to end the war in Ukraine. Since returning to office, President Trump has struck a hardline tone toward Russia. On Inauguration Day, President Trump said that Russian President Vladimir Putin was "destroying Russia" by waging war in Ukraine. Two days later, in a post on Truth Social, President Trump called on Putin to "settle now" and "make a deal" to end the war in Ukraine, or else he would "have no other choice but to put high levels of [t]axes, [t]ariffs, and [s]anctions on anything being sold by Russia to the United States, and various other participating countries." President Trump's comments follow recent speculation that the Trump administration was crafting a "wide ranging" sanctions strategy that would tighten sanctions on Russia if President Putin refused to negotiate a cease fire. The precise timing and trigger for the Trump administration to follow through with stricter sanctions on Russia remain unclear, and sanctions relief for Russian officials, industry, financial institutions and others is still expected to be a core component of any peace negotiations.

China

It is expected that President Trump's sanctions against China will be one component of a broader trade competition strategy aimed at China, to include tariffs and export controls, among other efforts. President Trump is expected to more aggressively sanction targets in China than the Biden administration. The Biden administration primarily targeted Chinese persons that were alleged to have facilitated the circumvention of economic sanctions or export controls imposed on Russia and Iran. In keeping with President Trump’s hardline foreign policy on China and the views of his foreign policy team, we expect the Trump administration to consider more sanctions related to China’s alleged involvement in the flow of fentanyl into the United States, forced labor practices in the Xinjiang region, facilitation of the shipment and sale of Iranian oil, and antidemocratic activities.

Iran

We anticipate that the Trump administration will resume its "maximum pressure campaign" against Iran. During his first term, President Trump withdrew from the Joint Comprehensive Plan of Action (i.e., the Iran nuclear deal) and reimposed stringent sanctions, including secondary sanctions, on virtually all aspects of the Iranian economy. More recently, there has been public reporting that Iran backed an assassination attempt against President Trump. While the Biden administration maintained many of the Trump-era sanctions, we expect that President Trump may take steps to increase sanctions on Iran and its alleged facilitators even further. One key area to watch will be whether there is increased enforcement of secondary sanctions on non-Iranians who engage with the Iranian oil sector or other key sectors of the Iranian economy.

North Korea

In his first term, President Trump made history by engaging in direct talks with North Korean leader Kim Jong Un, but this visit changed little in regard to US sanctions policy. President Trump’s first administration maintained strict sanctions against North Korea. President Trump returns to office at a time when Kim Jong Un’s regime has developed greater financial and technological ties to China, Iran, and Russia, including through the growing military cooperation between Russia and North Korea on the battlefield in Ukraine.

Venezuela

There is considerable uncertainty regarding President Trump's approach to Venezuela. In his first term, President Trump was a vocal opponent of Venezuelan leader Nicolás Maduro. Many of Trump's supporters and his foreign policy team, including Secretary of State Marco Rubio, are also strongly opposed to Maduro. However, recent reports indicate that oil industry executives have urged President Trump to negotiate a deal that will provide Maduro regime with sanctions relief in exchange for Venezuela accepting more deportations of Venezuelan migrants. Although we expect that many in the Republican Party would oppose the weakening of sanctions on Maduro, President Trump is expected to make the deportation of migrants a central part of his immigration plan.

Cuba

During his final week in office, President Biden eased several restrictions on Cuba, including most notably, removing Cuba from the list of State Sponsors of Terrorism. On Inauguration Day, President Trump quickly rescinded President Biden's removal action. He also reinstated a Presidential Policy Memorandum on Cuba from his first term. President Trump’s decision to immediately change course on Cuba did not come as a surprise to many observers. Trump had placed Cuba on the list of State Sponsors of Terrorism during his first term.

West Bank

On Inauguration Day, President Trump revoked President Biden's Executive Order 14115, which authorized the imposition of sanctions on individuals and entities engaging in destabilizing activities in the West Bank. The West Bank sanctions program had been a contentious issue between President Biden and the Israeli government. President Trump was expected to quickly end the program once in office.

Key Administration Officials

Secretary of the Treasury

Scott Bessent has been confirmed as Secretary of the Treasury. Bessent, an investor and the founder of Key Square Capital Management, has reportedly said that his top priorities include delivering on President Trump's tax cut pledges, enacting tariffs, cutting spending, and "maintaining the status of the dollar as the world's reserve currency." Bessent addressed questions on sanctions at his Senate confirmation hearing, stating his view that the Biden administration's sanctions targeting Russia were "not fulsome enough," and also supported the use of sanctions to address concerns regarding Iran. Nonetheless, there is considerable uncertainty regarding his views on sanctions as a policy tool, and the extent to which he will advocate for them to be employed.

Secretary of State

On January 21, 2025, the Senate unanimously confirmed Marco Rubio, a former Senator from Florida, to serve as Secretary of State. During his time in the Senate, Rubio was deeply engaged in foreign policy issues and was a staunch advocate of increasing US sanctions on China, Iran, Venezuela, and Cuba, among others. It remains to be seen how much influence Rubio will exercise in Trump’s cabinet. Rubio has significant foreign policy experience, though Trump often relies on more informal networks of advisors for some of his most consequential decisions. During his first term Trump has took unorthodox foreign policy approaches that stood in contrast to the views of the then Republican establishment.

National Security Advisor

President Trump has named US Representative Mike Waltz (R-FL) to serve as National Security Advisor. Waltz is a former Green Beret who also served as an adviser to Secretaries of Defense Donald Rumsfeld and Robert Gates, and Vice President Dick Cheney. Though not statutorily responsible for any sanctions programs, we anticipate that Waltz will exert considerable influence over the direction of US sanctions policy. In particular, we expect Waltz may advocate for using sanctions as leverage in resolving the Russia-Ukraine war and employing sanctions as part of the US trade competition with China. Waltz does not require Senate confirmation.

How we can help:

Navigating the rapidly changing sanctions regime under the second Trump administration.
Developing or updating sanctions risk assessments, compliance policies, and training programs.
Conducting internal investigations and due diligence to assess sanctions risks of past and future transactions.
Engaging with OFAC on blocked property reporting, license applications, and voluntary self-disclosures.
Responding to and defending against US government inquiries, subpoenas, and investigations.

In August 2022, President Biden signed into law the Inflation Reduction Act (IRA) to make the largest federal investment in climate and clean energy policy. After facing a decade of short-term and temporary extensions, the IRA provided clean energy tax incentives for wind, solar, and other technologies with long term extensions, many for up to 10 years or longer, while also expanding and creating new incentives for hydrogen, carbon capture and sequestration, and clean energy component manufacturing. Over the last two years after the IRA was enacted, the Department of Treasury and IRS, often working closely with the Department of Energy, have issued regulations and other IRA-related tax guidance to implement the IRA's clean energy tax provisions.

During his campaign, President Trump ran on a platform that emphasized oil and gas drilling, criticizing clean energy programs, and vowing to "terminate" the IRA. Republicans in Congress have also proposed repealing, in whole or in part, the IRA's clean energy tax provisions. However, Republican-led districts and states have significantly benefited from the investment and jobs created by projects claiming the IRA's credits. Republicans may feel political pressure to not repeal or modify the IRA's credits due to projects providing jobs and investment in their states and districts and limit President Trump's ability to fully repeal the IRA's clean energy tax credits.

What we could see from the new administration:

Support for potential repeal or modification of clean energy tax credits in budget reconciliation legislation to offset the cost of extending expiring TCJA provisions. The Trump Administration is likely to focus on repealing the clean vehicle credit and the "technology neutral" clean electricity investment and production credits.
Strengthening existing requirements or calling for additional legislation to limit companies considered "foreign entities of concern" from benefitting from the IRA's tax credits.
Support for an innovation agenda that includes tax incentives for carbon capture and sequestration and clean hydrogen from natural gas.
Modification or rescission of the Biden Administration's clean energy tax guidance and regulations.

Nominees for office:

Department of Energy: Chris Wright, Secretary (confirmed)
Department of the Treasury: Scott Bessent, Secretary (confirmed)

How we can help:

Track developments and legislation in Congress related to modification or repeal of the IRA's tax incentives.
Review current or prospective projects and analyze any implications of repeal or potential for repeal of specific tax provisions.
Examine supply chain and accompanying contractual agreements to assess legal risks related associated with potential classification as a "foreign entity of concern."
Identify opportunities or protect existing provisions in expected tax legislation in 2025 and advocate before Congress.
Track or advocate for new or modified tax regulations and guidance issued by the Department of Treasury or IRS.

The past four years have proven to be challenging for the fintech sector. We have seen the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) step up enforcement actions, the CFPB draft new and proposed rules that expand their jurisdiction and impose stiff fines, and the Office of the Comptroller of the Currency (OCC) and Internal Revenue Service (IRS) issue guidance that has limited widespread adoption of blockchain-based financial products by traditional financial institutions. Much of this may soon change under the new Trump administration.

The second Trump administration will bring agency leadership changes that may dramatically shift what some have viewed as an anti-business landscape. It is already clear that we will soon have a new SEC Chair, Treasury Secretary, Commerce Secretary, and Attorney General. Other leadership changes beyond the cabinet level are expected. Collectively, these changes, along with a new tone from the top, are expected to create a more pro-business climate that stands to benefit the fintech sector.

What we could see from the new administration:

Relaxation of Regulatory Barriers

Simplified compliance reduces costs for fintechs.
Encourages growth in alternative lending models, such as buy now, pay later (BNPL) and peer-to-peer (P2P) lending.
Fosters experimentation with AI-driven credit models.

Encouragement of Public-Private Partnerships

Collaboration on digital payment infrastructure.
Government adoption of fintech services (e.g., blockchain for public services).
Opportunities to modernize government payment systems.
Crypto and blockchain-friendly policies.
Lighter regulations on cryptocurrency will encourage innovation.
Stablecoin support could spur advancements in decentralized finance (DeFi) and cross-border payments.

Easier Access to Capital

Deregulation of initial public offering (IPO) processes would make fundraising easier.
Encouragement of private investment would channels venture capital to fintechs.
Increased funding enables startups to scale more rapidly.
Increased funding may also increase the volume and pace of mergers and acquisitions in the fintech space, and of fintechs by traditional financial services institutions.

Deregulation in Traditional Banking

Deregulation pushes banks to adopt fintech-driven solutions, including open banking.
Stimulates competition and innovation in the financial sector.

Collaboration

Promotes collaboration between banks and fintechs.

Favorable Tax Policies

Lower corporate taxes free up funds for R&D.
R&D tax credits incentivize technological advancements.
Capital gains incentives boost venture capital investments.

Nominees for office:

Treasury Secretary: Scott Bessent, confirmed
Commerce Secretary: Howard Lutnick, confirmed
Attorney General: Pam Bondi, confirmed
SEC Chairman: Paul Atkins, confirmed
CFPB Director: Jonathan McKernan, nominated
Comptroller of the Currency: Jonathan Gould nominated as Comptroller (Rodney Hood named acting Comptroller)
IRS Commissioner: Billy Long, nominated

How we can help:

By staying ahead of regulatory and market changes, we can empower our clients to seize opportunities, innovate responsibly, and navigate legal risks effectively. Proactive communication, customized solutions, and comprehensive compliance strategies will be key to ensuring success in this dynamic landscape.

Monitor Regulatory Changes

Stay informed on regulatory shifts, such as reduced compliance requirements, tax incentives, or crypto-friendly policies, and provide real-time updates.
Advise on compliance frameworks to prepare for any changes, ensuring alignment with federal and state laws even as rules evolve.

Tailored Legal Strategies for Innovation

Help capitalize on relaxed regulations by structuring partnerships, joint ventures, or M&A activities that leverage new fintech innovations (e.g., embedded finance or blockchain solutions).
Draft strong partnership agreements to avoid disputes and ensure intellectual property (IP) protections for proprietary technologies.

Proactive Risk Management

Assist in identifying opportunities in areas like DeFi, crypto, tokenization, and AI-driven models, while navigating ethical and operational risks.
Draft robust policies for data privacy, AML compliance, sanctions, and ethical AI usage to align with anticipated regulatory expectations.

Enhance Preparedness for Partnerships

Advise on forming strategic alliances with banks, government agencies, or tech firms to expand market reach.
Draft clear commercial agreements and outline risk-sharing mechanisms, especially in emerging or unregulated markets.

Advocacy and Representation

Represent clients in discussions with regulators and policymakers to shape favorable laws and clarify compliance expectations.
Ensure preparedness for audits, investigations, or litigation related to new fintech regulatory requirements.

During the former administration, there were not significant legislative changes to the Bankruptcy Code. The courts, however, have been active. A number of hot issues have arisen in recent years. Broad venue rules have remained in place, which allows many debtors to file for bankruptcy (especially in Delaware), where they are incorporated, even if their principal place of business and assets are not within Delaware. With President Biden out of office, one of the strongest supporters of the current venue system will no longer be relevant to the debate.

Additional issues regarding corporate use of divisional merger to split a company into a "good" company with operating assets, and a "bad" company with mass tort liabilities followed by a bankruptcy for the bad company, have raised a number of issues about whether this is an appropriate use of bankruptcy.

Additionally, a recent Supreme Court decision has limited the availability of non-consensual third-party releases in non-asbestos mass tort proceedings.

What we could see from the new administration:

US Trustees (DOJ employees) who monitor and oversee bankruptcy proceedings will likely be replaced. There are US Trustees for each district.
While it is possible that there will be changes to the Bankruptcy Code to change venue provisions, who can be a debtor, and when non-consensual third-party releases can be granted, we do not expect that any of these changes will occur in the short term. They are more likely to occur later in the term of the new administration.
Although we do not see an immediate direct impact in this practice area, there may be indirect impacts:
- Regulatory changes may make it harder for businesses in some industries, which may result in a need to restructure debts, reorganization of the business, and/or insolvency proceedings.
- Similarly, changes to taxes and/or tariffs could negatively impact certain industries resulting in an increased need to restructure debts, reorganization of the business, and/or insolvency proceedings.
- Changes in interest rates may also make restructuring of debts more important.
- Energy availability may affect some areas of the economy more than others, with resultant effects on business.

Under the leadership of President Biden, the former administration made a material turn towards green power with initiatives that included rejoining the international Paris Agreement on climate change, approving plans to build a national electric vehicle charging network, incentivizing the purchase of electric vehicles, and imposing a wide range of regulations and costs on the oil and gas sector. From a transactional perspective, the result of the Biden administration's initiatives was overwhelmingly positive for renewable energy participants; less so for oil and gas market participants. On the regulatory and litigation front, significant disputes arose concerning the manner and method by which renewables could be integrated into the grid, and challenges related to climate change against energy companies ramped up. Much is expected to change under the new Trump administration, with a reconfiguration of perceived "winners" and "losers." Many of the changes, however, could be less drastic than anticipated.

During the campaign, President Trump made it clear that he would refocus the nation's energy policy on maximizing oil and gas production and away from climate change initiatives. In addition, the President has stated that, under his new administration, the US will withdraw from the Paris Agreement and that he will seek the repeal of the Inflation Reduction Act. Many of President Trump's proposals are likely to be implemented; others may prove more difficult and/or not politically expedient. Using a broad brush, the oil and gas sector can indeed expect to see not only reduced regulation as well as the implementation of other measures designed to further the President's vision of energy independence. The renewable energy sector should expect to receive less emphasis than given it by the previous administration, though fears of material harm to energy transition may be overblown. While regulatory and litigation challenges materialize in any political climate, it is likely that they will "flip" to some extent, with renewable and less-traditional energy sources fighting (both before regulators and in courts) to keep the benefits they gained over the last four years.

The new administration will create a landscape that looks noticeably different than that which the previous administration left behind. While certain market participants will benefit more than others, the transactional market should remain robust for most. We expect challenges to government action in the energy space to ramp up, especially in light of the Supreme Court's recent repeal of the Chevron doctrine and broader reluctance to support agency actions.

What we could see from the new administration:

Roll-back of climate rules and regulations – Nearly 100 environmental rules were rolled back in Donald Trump's first term. The President promised the same on the campaign trail in 2023-24; market participants should be prepared for a similar roll-back in his second term.
Resume approvals for new gas export facilities – President Biden paused approvals for new LNG terminals. Many expect this pause to be rapidly reversed in the early days of the new administration.
Increase oil and gas drilling – Under the new administration, oil and gas companies should expect an increase in number of permits and a geographical expansion of exploration locations, including in the Gulf of Mexico and on federal lands, with new exploration impacted more by crude prices rather than federal limitations.
An effort to limit the Inflation Reduction Act – Despite the campaign rhetoric, a full repeal of the Inflation Reduction Act seems unlikely; the majority of $220 billion in investments in a variety of renewable technologies and projects are in Republican districts currently benefiting from those investments. There may, however, be significant amendment to the Inflation Reduction Act, and future investment could be expected to slow.
The Paris Agreement – The new administration has already stated it will remove the US from the Paris Agreement.
Big Tech and data centers may be winners – With over 50 GW of data center announcements in the past 24 months, and an increased chance of coming to fruition under a Republican-supported permitting regime, the biggest remaining challenge may be sources of power and the web that is state public utility commission and FERC policy, rules and regulations.
Solar – possibly little change, including continued flat growth as result of interconnection and transmission challenges. The pace of growth within the sector may be adversely impacted, however, by potential changes to the Inflation Reduction Act.
Onshore Wind – Onshore wind may be adversely impacted by measures currently being discussed with respect to the repeal of certain components of the Inflation Reduction Act, as well an earlier phase-out of the production tax credit.
Offshore Wind is likely to fare worse, with an administration that has, of late, been outspoken in opposition to it. The impact of the new administration’s views will remain to be seen, but interested parties will be watching for guidance on the domestic content bonus credit for offshore wind, as well as other tax incentive regulations.
The energy storage sector may thrive, or at least not be materially thwarted, in the new administration. Questions remain, however, as to impacts resulting from potential sooner-than-planned phaseouts of tax incentives and/or limitations on transferability of tax credits.
An increased focus on small modular reactors – As a relatively new entrant to the energy mix, small modular reactors may be expected to get a further boost from an incoming administration bent on energy independence and US leadership in the energy sector.
Potential reversal of existing agency rules, and a reduction in newly created rules, thanks to President Trump’s newly announced Department of Governmental Efficiency and general antipathy towards executive rulemaking.
Increased litigation relating government action by groups dissatisfied with the turn in administration. Many entities may view litigation as the only viable avenue to impacting policy, rather than more traditional means.

Nominees for office:

Secretary of Energy: Chris Wright (confirmed)
Secretary of Interior: Doug Burgum (confirmed)
EPA Administrator: Lee Zeldin (confirmed)
FERC Chairman: Mark Christie

How we can help:

Review proposed amendments to the Inflation Reduction Act and determine likely impacts on the renewable energy and energy transition sectors.
Advocate for retaining or adopting new legislative incentives or amendments to existing incentives.
Monitor macro and micro legislative and rules and regulations moves impacting the potential ascent of new sectors (e.g., small modular reactors) and the decline of others (e.g., offshore wind)
Advise with respect to the structuring of project finance and M&A transactions with a continuous monitoring of impacts resulting from action taken by the new administration.
Monitor and review changes to both (i) domestic content rules as they impact various energy sectors, such as solar and wind, (ii) supply chain issues and potential tariffs.
Monitor and review changes to federal lands leasing policy and other developments anticipated to impact the oil and gas exploration sector.
Review the modification to, or elimination of, Biden-era environmental rules and regulations for impact on the energy sector as whole, and individual projects in particular.
Evaluate potential strategies, either in litigation or before agencies, to amend or seek to rescind unhelpful or unfavorable regulations.

During his first term, President Trump enacted the Tax Cuts and Jobs Act (TCJA), which was the first significant rewrite of the tax code since 1986 and made several changes to existing individual, estate, corporate, and international tax provisions but was passed on a purely partisan basis.

When the TCJA was enacted in 2017, several of the provisions were set to expire in 2025, including several provisions that impact businesses. As a result, Congress is likely to consider significant tax legislation in 2025.

The Congressional Budget Office recently estimated that permanently extending the TCJA’s provisions would cost more than $4 trillion over 10 years. The cost of extending these expiring tax provisions, along with President Trump’s other tax proposals, will also be a focus and Congress may attempt to modify or eliminate certain tax provisions, cut federal spending, or impose additional tariffs to offset the costs of the TCJA's extension.

With complete control, Republicans will likely face pressure to maximize tax policy favorable for businesses to spur growth and investment but certain factions of the Republican Party in Congress have developed a more populist approach to reducing taxes on the middle class.

President Trump has proposed making permanent, extending, and/or modifying certain provisions of the TCJA. On the campaign trail, President Trump also proposed several new tax policies that focused mainly on excluding certain types of income from federal taxation, such as tipped wages, overtime pay, and Social Security benefits.

What we could see from the new administration:

Urging Congress to extend the TCJA's key business provisions such as section 174 R&D expensing, bonus depreciation, the section 163(j) enhanced business interest deduction, and the section 199A qualified business income deduction for pass-through entities.
Support for reducing the corporate tax rate to 20% and lowering the effective corporate tax rate for domestic manufacturing to 15%.
Support to change certain business-unfavorable aspects of the TCJA international tax provisions, such as with respect to the effects of expense allocation on GILTI or other aspects of the GILTI regime.
Implementing tariffs to raise additional revenue to offset the cost of extending the TCJA's expiring provisions.
Support for cutting or rescinding IRS funding, including additional cuts to the $80 billion in funding provided to the IRS under the Inflation Reduction Act.
Changes to the Biden Administration's approach with respect to the OECD.

Nominees for office:

Secretary of the Treasury: Scott Bessent (confirmed)

How we can help:

Monitor developments and legislation in Congress related to extension of the TCJA and any additional tax provisions to be considered.
Analyze the potential effect of the tax policies proposed by President Trump or Congressional Republicans on certain transactions, projects, or businesses.
Track new or modified tax regulations and guidance issued by the Department of Treasury or IRS.
Identify opportunities or protect existing provisions in expected tax legislation in 2025 and advocate before Congress.
If legislation is enacted, advocate for regulations and other guidance before Treasury and the IRS.

Lifetime federal gift and estate tax exclusions allow for assets to be transferred during lifetime or at death, free from gift, estate, or generation-skipping transfer (GST) tax. The 2018 Tax Cuts and Jobs Act, which passed during President Trump's first term in the White House, increased the Basic Lifetime Exclusion amount to $10,000,000 as of January 1, 2018, and after inflation adjustments, the amount that may now be transferred during life or at death free of gift or estate tax is $13,610,000 and is projected to increase to $13,990,000 as of January 1, 2025. The exclusion amount is for all transfers in the aggregate above and beyond annual exclusion gifts. If a portion of the exclusion is used during life, it will reduce the amount available to be used at death. The exclusion amount reverts to $5,000,000 (adjusted for inflation) for decedents dying and gifts made after December 31, 2025 when the provisions of the 2018 Tax Cuts and Jobs Act sunset.

Democrats have long argued in favor of replacing the current transfer tax system with a wealth tax in an effort to redistribute and equalize wealth and responsibility across the nation, but have never gained any real traction with this concept. President Trump was not very vocal about estate taxes in his recent campaigning as he had previously been, focusing his campaign promises more on lowering the corporate tax rate, repealing the deduction cap for state and local taxes, and ending the taxation of tip income, Social Security benefits, and overtime pay. But he has in the past said that he would like to eliminate the estate tax, characterizing it as a "a disaster," "double taxation," and "a horrible weapon that has destroyed many families."

Together, a Republican President and Congress may augment or make permanent the transfer tax system currently in place. It is even possible that the transfer tax system could be repealed entirely. It's unclear yet how this would be done, as both possibilities would have significant budget costs that will need to be balanced with other revenue streams.

What we could see from the new administration:

Expect the new administration to move quickly in 2025 to extend or make permanent the provisions of the 2018 Tax Cuts and Jobs Act that are set to expire at the end of 2025, including the higher Basic Lifetime Exclusion Amount.
Total repeal of the transfer tax system is also a possibility and would likely be paired with elimination of the adjustment of basis at death for purposes of capital gains.
President Trump has also proposed taxing gain at death, rather than simply on the sale of property, with an exemption for estates under $10 million.
Lower interest rates can also be expected.

How we can help:

A continued rise in the markets and lower inflation could lead to substantial increases in asset values. A permanent increase to the Basic Lifetime Exclusion Amount combined with lower interest rates presents significant estate planning opportunities to move these assets out of your taxable estate. And moving assets out sooner rather than later allows you to move more appreciation to your donees over time.
- Consider making additional gifts to take advantage of increased gift tax exemption planning. Gifts made during your lifetime remove both the value of the gifted property as well as any appreciation on that property from your taxable estate, thus minimizing what may be taxed at your death.
- Lifetime gifts may be further leveraged by the use of dynasty trusts to which GST tax exemption is allocated. These transfers allow property to pass in trust for the benefit of multiple generations free of estate, gift, and GST tax. Dynasty trusts also are a valuable tool to protect assets from creditors, including spouses in the event of a divorce, to make sure younger generations are protected from having too much wealth in their own hands, and in some cases to preserve unity of ownership.
- Relatively low interest rates continue to make Grantor Retained Annuity Trusts (GRATs) and sales to grantor trusts effective planning tools.
If the increased exemption amounts are made permanent, review current estate plans to ensure any "formula gifts" of exemption amounts are still appropriate and not too large.
Consider whether planning focus should include both transfer tax planning and income tax planning. If the estate tax is not eliminated, property included in the taxable estate will likely continue to receive a step-up in basis at death. Whereas, assets gifted during your lifetime will not receive a step-up in basis at death. Therefore, income tax considerations must be taken into account in deciding whether to make lifetime gifts. For those whose total taxable estate is well under the new higher exemption levels it may make sense to make transfers at death rather than during life and to consider "undoing" certain plans to bring appreciated assets back into the estate. However, the avoidance of capital gain tax must be weighed against any state level estate taxes on such assets as well as the risk that the assets will appreciate beyond the exemption actually available at the time of death.
If the basis step-up at death is eliminated and/or unrealized gains are taxed at death, planning will necessarily require an analysis of the capital gains consequences of continuing to hold highly appreciated assets until death.
There are other non-tax reasons to review your estate plan.
- Review your current estate plan to ensure that it appropriately addresses major life events such as a marriage, divorce, or birth of a child or grandchild.
- Consider whether existing trusts need to be decanted to adjust the way property is distributed to certain beneficiaries by changing the trust provisions.
- Review all beneficiary designations to ensure that they do not conflict with your overall testamentary plan.

What we could see from the new administration:

Expect the new administration to move quickly in 2025 to extend or make permanent the provisions of the 2018 Tax Cuts and Jobs Act that are set to expire at the end of 2025, including the higher Basic Lifetime Exclusion Amount.
Total repeal of the transfer tax system is also a possibility and would likely be paired with elimination of the adjustment of basis at death for purposes of capital gains.
President Trump has also proposed taxing gain at death, rather than simply on the sale of property, with an exemption for estates under $10 million.
Lower interest rates can also be expected.

How we can help:

A continued rise in the markets and lower inflation could lead to substantial increases in asset values. A permanent increase to the Basic Lifetime Exclusion Amount combined with lower interest rates presents significant estate planning opportunities to move these assets out of your taxable estate. And moving assets out sooner rather than later allows you to move more appreciation to your donees over time.
- Consider making additional gifts to take advantage of increased gift tax exemption planning. Gifts made during your lifetime remove both the value of the gifted property as well as any appreciation on that property from your taxable estate, thus minimizing what may be taxed at your death.
- Lifetime gifts may be further leveraged by the use of dynasty trusts to which GST tax exemption is allocated. These transfers allow property to pass in trust for the benefit of multiple generations free of estate, gift, and GST tax. Dynasty trusts also are a valuable tool to protect assets from creditors, including spouses in the event of a divorce, to make sure younger generations are protected from having too much wealth in their own hands, and in some cases to preserve unity of ownership.
- Relatively low interest rates continue to make Grantor Retained Annuity Trusts (GRATs) and sales to grantor trusts effective planning tools.
If the increased exemption amounts are made permanent, review current estate plans to ensure any "formula gifts" of exemption amounts are still appropriate and not too large.
Consider whether planning focus should include both transfer tax planning and income tax planning. If the estate tax is not eliminated, property included in the taxable estate will likely continue to receive a step-up in basis at death. Whereas, assets gifted during your lifetime will not receive a step-up in basis at death. Therefore, income tax considerations must be taken into account in deciding whether to make lifetime gifts. For those whose total taxable estate is well under the new higher exemption levels it may make sense to make transfers at death rather than during life and to consider "undoing" certain plans to bring appreciated assets back into the estate. However, the avoidance of capital gain tax must be weighed against any state level estate taxes on such assets as well as the risk that the assets will appreciate beyond the exemption actually available at the time of death.
If the basis step-up at death is eliminated and/or unrealized gains are taxed at death, planning will necessarily require an analysis of the capital gains consequences of continuing to hold highly appreciated assets until death.
There are other non-tax reasons to review your estate plan.
- Review your current estate plan to ensure that it appropriately addresses major life events such as a marriage, divorce, or birth of a child or grandchild.
- Consider whether existing trusts need to be decanted to adjust the way property is distributed to certain beneficiaries by changing the trust provisions.
- Review all beneficiary designations to ensure that they do not conflict with your overall testamentary plan.