“Times have changed.  Make sure your planning has changed, too,” New Jersey estate planner Martin Shenkman advises financial planners. Estate planning, Shenkman says, is much too often built upon assumptions that may no longer be true.

Charitable giving
What continues to be true is that clients at the highest and the lowest income levels give the most to charity. It’s easy to understand the first group – they can afford to give more. But, until now, planners have assumed lowest-income taxpayers give a lot because of religious considerations. But there may be a different reason altogether: the wealth effect. Those “low-incomers” actually have a lot of wealth relative to income. Advisors – including estate planning lawyers – need to understand that charitable giving may have nothing to do with getting tax deductions and everything to do about expressing  societal beliefs.

Charitable planning for wealthy clients used to center on avoiding federal estate tax. But with the estate tax exemption for a married couple now nearing $11 million, Shenkman explains, most estates will never face the tax.  Advisors, therefore can guide clients to make donations while alive, providing an income tax deduction.

Irrevocable trusts
Until recently, courts and laws have viewed irrevocable trusts as carved in stone. Today, as Shenkman points out, many states permit the “decanting” of trusts (merging old trusts into new ones). Trusts can now be updated to give clients a better result.

One example Shenkman cites is an old trust set to distribute all assets to children upon their reaching age 25.  A longer trust term could provide better asset protection and divorce protection.

Revocable trusts
Revocable trusts, largely used in the past to avoid probate, can be amended to protect clients against adverse actions by a trustee. As clients continue to live longer, revocable trusts can be redesigned to protect clients from identity theft and elder financial abuse.

In providing in-depth counseling to individuals and families, the attorneys of Rebecca W. Geyer & Associates take a lifetime planning approach, which by definition includes making changes as the laws change – and as circumstances change.

We know that Martin Shenkman is right – planning cannot be built on assumptions that may no longer be true!

– by Ronnie of the Rebecca W. Geyer blog team