NATIONAL ESTATE PLANNING AWARENESS WEEK
© 2014, 2015, 2017 C. David Clauss
I write often about the importance of not delaying one’s planning – bad things can happen while we’re “thinking about it”, or as my father used to say, “Just make a decision, even if it’s the wrong one.”
Stated another way, “Even if your estate plan is not perfect, it’s gotta be better than no estate plan at all.”
The only bad decision we can make about our estate planning is the decision to delay.
A few years ago, Congressman Mike Thompson and 49 of his colleagues cosponsored and helped pass House Resolution 1499, adopted on September 27, 2008, creating National Estate Planning Awareness Week in the third week of October in each year. That was a meaningful endorsement of the importance of estate planning to all of us, and to our families and our loved ones.
So, what is “estate planning”? Estate planning encompasses the growth, conservation, protection, and transfer of one’s financial wealth by developing a strategy that will help bring financial security to loved ones during life and accomplish the efficient transfer of assets, taking into account a family’s unique circumstances and goals. Estate planning can, and often should, also involve the passing of important values to younger generations.
Quoting from my book, GENERATIONS – Planning Your Legacy, a good estate plan will satisfy the following goals:
I want to control my property while I am alive and well, care for myself and my loved ones if I become disabled, and be able to give what I have to whom I want, the way I want, and when I want, and, if I can, I want to save every last tax dollar, attorney fee, and court cost possible.
Yes, saving taxes, legal fees, and court costs are almost always an important part of proper estate planning – I haven’t yet heard clients say that increasing attorney fees and paying more taxes are important goals.
Interestingly, during the last week of September, Republican leaders issued a brief “framework” for proposed tax change, including reducing corporate and personal income tax rates, as well as completely eliminating the federal estate tax. It is interesting to note that, under the previous administration, the federal estate tax was eliminated for all but the wealthiest 0.2% of Americans. In addition, the Tax Policy Center estimates that only about 80 small businesses and farming operations in the U.S. will be subject to estate tax in 2017.
Regardless of how few families and small businesses are wealthy enough to be concerned about the federal estate tax, I have described the tax for years as a “voluntary tax”. We can either engage in the planning appropriate to eliminate the tax, or we can refrain from engaging, in which event we “volunteer” our loved ones to pay the tax.
And, regardless of how we feel about doing the planning appropriate to save taxes for our loved ones, for many of us, there’s more than money involved in estate planning – protecting and providing for loved ones, passing along important ethical values and family traditions – the list is long, and is probably different for each family.
So, regardless of what Congress does, or doesn’t do, please take a few minutes during the third week of October to think about what’s truly important in your life and pick up the telephone and call the most expert estate planning lawyer you can find and get going with your estate and wealth planning. And, if you already have an estate plan, meet with an expert estate planning lawyer and review your existing plan now to be sure your plan is up to date. With so many changes in the tax laws (and other laws) over the past decade, many plans that were “state of the art” when drafted simply no longer work as originally intended.
Laws can change, families can change, and goals can change. Indeed, in my practice I have encountered multiple situations in which a family implemented a state of the art estate plan and then forgot about it for years. Meanwhile, tax laws changed (for the better, I might add), goals changed, circumstances changed; and when the client died, the survivors were unpleasantly surprised to learn that, even though the tax laws were more favorable, the “state of the art” plan yielded unwanted results such as disinheriting a surviving spouse, and leaving a significant unprotected inheritance to a spendthrift child.
No lawyer can represent that an estate plan will work properly if it is not reviewed and updated frequently in order to consider the effects of changes in circumstance, changes in goals, changes in the law, and changes in the state of the art. (Yes, the art of estate planning does, indeed, change over time; and some sophisticated strategies that are commonplace today did not exist only a few years ago.)
I respectfully urge all of my friends and colleagues (Yes, lawyers need estate plans, too.) and their young adult children to implement an estate plan now. (For young adults, the estate plan might be as simple as a health care power of attorney – very important because parents may no longer have the legal ability to make health care decisions for their adult children.)
Do not delay. If you own anything, if you care about anyone, please take care of business now.
Even though the foregoing does not include any legal or tax advice, please note that any advice contained in this message is not written for, and is not intended to be used by, and may not be used by, any taxpayer for the purpose of avoiding any penalty with respect to tax that may imposed upon a taxpayer. (See IRS Circular 230.)
C. David Clauss
Attorney & Counselor at Law
320 East Broadway, Suite 2A
P.O. Box 1172
Jackson, Wyoming 83001