President Biden’s American Families Plan could raise capital-gains taxes and end a rule that has been a cornerstone of estate planning for generations of wealthy Americans. The change, increasing the top capital-gains rate to 43.4 percent from 23.8 percent and taxing assets as if sold when someone dies, would upend the tax strategies of the ultra-wealthy. 

Additionally, under the new proposal, less wealthy multimillionaires who have been spared from the estate tax could face capital-gains taxes at death. Today, people who own assets that have boomed in value don’t pay capital-gains taxes unless they sell. Under the new proposal, those unrealized gains would trigger taxes upon the owner’s death, minus a $1 million per-person exemption.

“Wealthy Americans with over $100 million in assets are already turning to a range of techniques to minimize the hit from steeper taxes on their wealth, and many have already shifted further into tax-advantaged assets,” said Mike Kosnitzky, co-leader of Pillsbury’s Private Wealth practice.

"The Biden proposal would make it tougher for the merely wealthy who use less sophisticated tax-planning vehicles to avoid a hit,” Kosnitzky added.