Estate planning is more than just wills, healthcare power of attorney and other documents. This brief article about gifting, and how it relates to estate planning, might be helpful to you. As an estate planning attorney I am always ready to assist my clients in this area as well.
The possibility of tax law changes in the New Year has put gifting front and center for clients, according to law firm and registered investment advisor executives.
Joe Growney, a partner in law firm Lathrop GPM’s Trusts, Estates & Legacy Planning Practice Group, says that his firm spent “the better part” of the last year trying to anticipate tax law changes under President Joe Biden. The potential for such changes is “still a significant issue” for many of the firm’s high-net-worth clients, especially in relation to estate or gift taxes, Growney said. “We’re working with clients to try to explain the current landscape. Some folks have taken advantage of the current laws and made significant transfers to family members in advance of any changes, and there still may be some clients who wish to take advantage of the current laws even if there isn’t an immediate change on the way,” Growney said.
“Going into next year we’ll continue to keep an eye on what happens in Washington,” he added.
Cooke Financial Group, an Indianapolis-based RIA firm in Sanctuary Wealth’s network, has also been working with its high-net-worth clients to plan for tax law changes — including in 2025 when the current legislation expires, according to partner Chris Cooke.
The past year saw “an important estate planning moment” for high-net-worth households when they had to decide whether or not to do substantial gifting to take advantage of the current law’s $11 million per person exemption “with the fear that that was going to be pushed back to $6 million,” according to Cooke. “That same concern is going to persist, whether it’s 2022 or 2025, when the current law expires. The exercise may prove useful because it brought this to the forefront of people’s minds,” Cooke said, adding that once a person is “mentally moved toward making those kinds of gifts,” the question becomes when to execute them.
“That trigger point is coming — it’s just a matter of when,” Cooke said.
Advisors should continue to have conversations with clients about gifting to keep the topic top of mind, according to Cooke.
“We as an investment and advisory community are going to need to keep this topic in the forefront of our clients’ minds and say regardless of what happens in 2022 with legislations, this is still going to be important — it’s not going away; the deadlines are just moving around a bit,” he said.
“That’s the discussion point with clients — let them know that eventually, there is a trigger point on this,” he added.
Aging Population
Demographics will also factor into estate planning in the new year as baby boomers age, according to Growney.
“Estate planning becomes a greater focus with an aging population, and we have a significant wealth transfer on the horizon as that generation starts leaving assets behind to their families. That will be a major development in our area,” Growney said.
“We’ll certainly see the fallout from that in working with clients and their families,” he added.
Retirement assets have also become “a major focus” as baby boomers age, according to Growney.
“That’s one special asset that we see on the planning side that many clients need to focus on, because in a lot of cases that’s their largest individual asset. Working through the tax issues and beneficiary issues are really unique to retirement accounts, and we see a lot more of those issues on our desk with more and more clients reaching retirement age,” he said.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate, or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate, or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526). David H. Lefton is an Estate Planning and Probate Attorney. He is a partner in the law firm of Barron, Peck, Bennie & Schlemmer.
From Financial AdvisorIQ online 1/4/22; written by Sam Del Rowe