New trust tax targets wealth—but loopholes may let the richest escape

What it does

This bill creates a new annual tax on the net assets held in trusts, with rates ranging from 0% to 3% depending on asset value, starting in 2027. The tax applies to most trusts with U.S. beneficiaries or grantors, but includes credits for taxes already paid and allows beneficiaries to allocate exemption thresholds across multiple trusts. It also treats payments by grantor-trust owners to cover trust income taxes as taxable gifts.

Why we flagged it

The bill's core mechanism is a progressive annual tax on trust assets, but the extensive exemptions (charitable trusts, retirement plans, revocable trusts), valuation discounts, and credit mechanisms suggest it is designed to appear more aggressive than its actual revenue impact may be.

• Section 4 treats payments by grantor-trust owners for trust income taxes as taxable gifts, unrelated to the core asset tax and potentially expanding the gift tax base.

What the text implies

• The 'look-thru rule' for 10-percent interests in other entities may create cascading valuation complexity and opportunities for tax planning through layered entity structures.
• The 'nonbusiness asset' definition and valuation rules (Section 2921) may allow significant discounts for real estate, operating businesses, and working capital, substantially reducing taxable trust assets for wealthy families.
• The credit system allows trusts to offset the new tax with credits for generation-skipping and estate taxes, potentially creating a net-zero or negative tax for trusts that trigger those taxes.
• Beneficiaries can elect to allocate unused bracket amounts differently than the default formula, creating planning opportunities to shift tax burden across multiple trusts and beneficiaries.
• The bill requires detailed annual reporting of trust assets and beneficiary interests, creating a new IRS information-gathering regime that may have privacy implications for trust beneficiaries.

Who it affects

The bill imposes a new tax on wealthy trust assets, which could increase revenue for public purposes and reduce wealth concentration. However, the complex credit system, valuation rules favoring non-business assets, and exemptions for certain trusts create significant loopholes that may allow high-net-worth individuals to minimize or avoid the tax, limiting its actual public benefit.

Who stands to gain

• Estate planning attorneys
• Trust and wealth management firms
• Family office service providers
• Appraisal and valuation firms
• High-net-worth individuals and families

Named in the bill

Internal Revenue Service (IRS), U.S. Treasury, Trusts (all types), Beneficiaries, Grantors, Corporations and partnerships held in trusts, Charitable organizations, Retirement plans (401k, etc.)

Where it stands

4 cosponsors: 4 Democrats.

• May 12, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• May 12, 2026 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $155,000 in lobbying spend. A filing names 34 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Patty Murray, the sponsor, reported $307,200 in PAC receipts in the 2026 cycle.

• The Patriotic Millionaires LLC — $80,000 on 1 filing
• National Women's Law Center Action Fund — $75,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.