The Fair Trusts for Fiscal Responsibility Act

In early May, Senators Murray and Wyden, introduced a new tax bill targeting the ultra-wealthy.  This does not apply to many of us, but this is an attempt to close the numerous individual loopholes that allow the wealthy to avoid transfer taxes. The Fair Trusts for Fiscal Responsibility Act of 2026 aims to create a new withholding system which impacts those that use trusts to avoid paying tax such as GRATS (Grantor Retained Annuity Trust) or Dynasty Trusts.

The bill will implement new valuation guidelines for non-tradeable assets and disallow valuation discounts for family-controlled entities. Philanthropic entities are excluded as well as ERISA plans.

Creates progressive annual withholding rates on assets in trust:

• Under $50m – 0%
• 1% on assets between $50 and $100 million
• 1.5% on assets between $100 and $250 million
• 2% on assets between $250 million and $1 billion
• 3% on assets above $1 billion

It will require annual reporting requirements detailing net-worth and beneficiary distributions to the IRS.