Posted by Robert L. Arone –

How to Help Your Clients Future-Proof Their Estate Plans

Through tried and true estate planning measures, we can make sure your clients’ plans are both flexible enough to handle change and sturdy enough to weather the uncertainty. In addition to providing wills, trusts, powers of attorney, and other core documents that make up a sound estate plan, we will continue to keep our fingers on the pulse of the legislative developments that will matter to them most.

While there have been several proposals that may impact estate planning, no significant changes have already taken effect. Let’s begin with a quick look back at these first 100 days and consider what they’ve meant for the U.S. tax and healthcare landscape. Then we’ll discuss strategies that can be used to make sure your clients’ estate plan are future-proof.

Actions from the first 100 days that could affect estate planning
To provide the best possible service to our clients, we closely monitor legislative changes that could throw a wrench in the gears of estate planning. Likewise, we’re always looking for opportunities to take advantage of government changes that might benefit our clients – and your clients – for years to come. Although no changes have been finalized, here are the key issues we are following:

1. The repeal and replacement of the Affordable Care Act
The Affordable Care Act, known as ACA or Obamacare, has been a hot topic on both sides of the aisle in the past few months and years. The American Health Care Act, which is the House Republican’s proposed replacement bill for the ACA, recently passed the House of Representatives, but still must go through the Senate before it can be enacted into law. At this point, it remains to be seen what the Senate will do and how this administration will ultimately change the healthcare laws.

2. Repealing the federal estate tax and GSTT
The federal estate or “death” tax does not come into play for most Americans, but those with high-value estates are currently taxed at 40 percent for the value of their estate above $5.49 million ($10.98 for a married couple). Repealing the death tax garners lots of attention in the current administration, with hints at possible headway being made all the time. There are numerous proposals in Congress, and it’s currently unclear whether death tax changes will be a separate law or included as part of a larger tax reform bill. We are watching the situation, and we’ll let you know as soon as something more definitive presents itself.

Another point of consideration is what would happen to the gift tax and generation-skipping transfer tax (GSTT) should the estate tax be repealed. Given the uncertainty surrounding these potential high-impact changes, the best tactic at this point is to plan for multiple scenarios and remain abreast of any pertinent proposals or votes in the coming months.

Why flexible planning is crucial in this period of flux
Of course, you know that estate planning does not equal death tax planning.  There are many non-tax reasons estate plans need to stay up to date regardless of legislative changes to our nation’s tax and healthcare laws. Here are just a few of many examples:

●        Privacy: Ensuring that the details of your clients’ estates do not become public record by way of probate proceedings

●        Protection from court interference: Avoiding situations like probate or living probate (also known as guardianship or conservatorship) by creating and funding a living trust

●        Long-term care: Appointing healthcare providers and healthcare powers of attorney in case you become incapacitated so that it does not become the court’s decision, resulting in guardianship or conservatorship.

Planning with flexibility is now more important than ever. No one can know exactly how proposed changes to our tax and healthcare systems will shake out in the coming months and years. In addition to the new administration’s effect on estate planning, the coming elections in 2018 and 2020 may provide even more changes to tax and healthcare policy. That’s why it’s more important now than ever to create a plan that achieves a client’s goals but has enough flexibility to roll with the punches.

Let’s make your estate plan ready for anything
Through tried and true estate planning measures, we can make sure a client’s plan is both flexible enough to handle any changes that come their way and sturdy enough to weather them. In addition to providing wills, trusts, powers of attorney, and other core documents making up a clients’ comprehensive estate plan, we will continue to keep our fingers on the pulse of the legislative developments that will matter to you and your practice most.

Times are changing, but a well-designed and flexible estate plan is always a benefit for your clients and their families. Feel free to get in touch with us anytime to discuss your clients’ needs in this shifting political climate, and together we can make sure their plans are in excellent shape and ready for whatever comes next.

This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.