Heckerling Report: Tectonic Plates to Shift Under Estate Planning World

Heckerling Report: Tectonic Plates to Shift Under Estate Planning World

The 53rd Heckerling Institute on Estate Planning wrapped up recently in Florida.

The main topic followed on from last year, with discussions of the huge recent shifts in the estate-planning industry. Our linked article reviews the highlights and we provide a summary.

The Tax Cuts and Jobs Act of 2017 remains the major ground-shaker. The doubling of the estate, gift and GST tax exemptions to $10 million offers an opportunity to the wealthiest taxpayers. The changes, albeit temporary, encourage the wealthy to increase charitable giving, but demand a review of their estate plans to assure provisions are up-to-date and in line with the new conditions.

Higher exemptions mean high-net-worth taxpayers can effectively leverage their giving over several generations in several ways. First, earlier plans can be topped-up via gifts to family trusts, either new or existing. Current installment payments to older family members can be prepaid with cash contributions, and intentionally defective grantor trusts can be boosted by new sales. Intra-family loans are also encouraged, where appropriate.

Some states are worse than others in their treatment of wealthy estates. The tax reform can help redress these issues at least temporarily for the residents of these ‘unfriendly’ states. In New York, where the estate tax can reach 16%, the increased federal exemption provides opportunities for wealthy taxpayers to limit the size of their taxable estate.

For example, to avoid falling afoul of the low limit of the New York estate tax (around half of the federal limit), state citizens can make a gift of sufficient size to bring their taxable estate below the state limit. This needs to be done three years before you die – a curious kind of gamble, but one that perhaps offers pretty good odds, all things considered.

For more information, please read:
A Seismic Shift in the Estate-Planning Landscape | Wealth Management


RIA Majors Talk Marketing Best Practice – and Worst Life Insurance Buyer’s Guide: A Seven-Step Program