More from Orlando: Even When Estate Taxes Are Irrelevant, Planning is Still Critical


Today I overheard a couple of lawyers discussing future tax legislation and what they believe the tax law should be.  Given that this week at Heckerling has been based on the premise that very few individuals will ever be subject to estate tax (less than .5% of the population), I am once more reminded that a future tax law that reduces tax consequences will have little impact on my clients anyway.  (According to two lectures, the numbers ranged from either 99.8% or 99.62% of decedents are not subject to estate taxes.)

Some concepts from the last day:

  1. If a client finds it important, they need to plan to make sure that your child (or other heirs) will talk to each other, after their death.
  2. A new law regarding access to digital assets at death is likely to be enacted within next few years in most states.
  3. The planning concepts that I have been proposing for the last 20 years are still important (i.e., positioning assets so that they will be protected during life and at death; when starting a new business, the entity ownership should be owned in a manner that is outside of client’s estate (for tax purposes); income taxes may be more important that estate taxes, so documents need to account for this; revocable trusts and lifetime trusts for heirs are still important; the IRS will continue to attack bad planning and bad facts; and clients should not be complacent…if the documents do not work in the current tax environment then they should do something to fix the documents or the situation.)
  4. Remember that every word – in a document, e-mail, letter or note – matters and must be carefully written.  Anything written may be subject to challenge later, either when the IRS audits or heirs fight.
  5. Planning done years ago could have been perfect then, but with new tax laws and new situations, it may not be perfect anymore and therefore need to be amended and changed.

More to come! – Gary

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