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Strategic Estate Planning In Uncertain Times

It has been a year since the historic election of 2016 and quite frankly, regardless of political ideology, almost every week has resulted in some form of uncertainty or confusion for our future. Regrettably, this week is no different. With only a handful of legislative days remaining in 2017, many of us are waiting with to find out when and how the President’s proposed tax reform plan will change the tax landscape. As you probably know, any changes to tax policy may mean you will need to revisit certain parts of your estate plan to ensure everything continues to effectively protect your family. The Trump administration and Congressional Republicans have been busy with many issues, but, as of now, there have not been any significant legislative enactments. Proposals ranging from tax cuts or reform, immigration reform, healthcare reform, and more still loom large. The state of proposed tax reform If Trump’s tax plan is pushed through as it currently reads, it will create a system with three tax brackets rather than seven. It would also completely eliminate estate and generation-skipping transfer taxes. Mortgage interest deductions would get an overhaul, and most itemized deductions would disappear. The stated goal of the President and Congress is a simplification of the tax rules, but like all prior tax laws, there will still be complexity. Yes, these are all very substantial changes. In addition to the uncertainty about how these changes would impact you as an individual, it remains to be seen whether this proposal will become law or not. So, we find ourselves with two primary considerations: The tax proposal would mean drastic changes, and no one is certain when, or if, it will go into effect. Is your estate plan in standby mode? This means, "the best course of action is to hold tight until the outcome becomes clear." Actually, this attitude could cost you!

Now is not the time to wait for news from the government before taking action, even though uncertainty about tax and health care policies may leave you thinking that doing nothing right now is appropriate.

The “wait and see” approach can spell disaster for your family if you die or become incapacitated without adequate, up-to-date planning in place — an obsolete estate plan or a plan that does not match your current estate planning goals and needs serves no purpose — regardless of what happens in the White House. An up-to-date plan always will. That is why the process of reviewing and revising your Will, Trusts, and other estate planning documents now is as important as ever.

Here is what you can do today Regardless of what the future holds, you should always focus on what you can control. Although changes to tax rates, deductions, exemptions, etc. may impact how much tax must be paid in any given year and the future of the death tax is uncertain, there are no credible proposals that do away with taxes altogether. You must have some plan in place to ensure your financial legacy avoids as much tax as possible, while also achieving all of your other estate planning goals and protecting your family’s wealth. Review your Will or Trust summary or diagram. As you do, ask yourself three questions:

  1. Am I 100% confident that I have named the best possible trustees, executors, agents, and guardians for children and myself?

  2. Am I 100% confident that my children, grandchildren, other relatives, charities, or others designated to receive my estate are the same beneficiaries I would name today?

  3. Do my trust asset schedules accurately list all of my financial accounts, insurance policies, retirement plans, rental or vacation properties, and other assets?

If you are not entirely comfortable with your answers to the questions above, then the best response to, “How do I move forward in uncertain times?” Get your planning 100% up-to-date — Give us a call at 301.892.2713. We can ensure your plan meets your current goals and needs. Of course, if you not yet have a plan, also call us so your goals and needs can be met and you can be prepared.

Happy Thanksgiving!

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