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Steve Leimberg's Estate Planning Email Newsletter - Archive Message #2526

Date: 14-Mar-17
From: Steve Leimberg's Estate Planning Newsletter
Subject: Robert W. Finnegan & Planning in Uncertain Times Part II: The Cost of Delay

 
 

 

With all of the uncertainty surrounding the future of the transfer tax system, many clients will consider delaying planning because it seems like a prudent course.  It is important however that they understand the substantial cost of delay in terms of wealth transferred to the family. This analysis utilizes a financial model to evaluate and understand these costs based on a few possible, and arguably likely, repeal scenarios and a set of reasonable assumptions as to the future. 

 

There are three essential takeaways from this analysis and from the prior newsletter (Estate Planning Newsletter #2492): 1) The cost of delaying planning measured by the amount of wealth transferred to the clients’ family at life expectancy is substantial; 2)it is essential that clients and advisors understand this cost of delay as well as take into account the many non-tax reasons for planning in order to make an informed decision whether or not to plan currently; and 3) due to the uncertainty around future transfer tax laws, it is important to consider flexible planning strategies and trust arrangements and site trusts in states with favorable decanting and other laws.”

 

 

In Estate Planning Newsletter #2492, Robert Finnegan provided members with commentary in Part I of this Newsletter reviewing: i) President Trump’s legislative agenda iii) estate tax repeal under President Trump’s plan or the GOP Blueprint, iii) the legislative hurdles to repeal and iv) the “permanence” of any legislation. Now, he returns with Part II of his commentary analyzing the high costs that can result when clients decide to delay gifting (without life insurance).  In a future Part 3 commentary, he will analyze cost of delaying gifting including life insurance.

 

Click this link to read his commentary:

 

EXECUTIVE SUMMARY:

 

Part I of this Newsletter reviewed i) President Trump’s legislative agenda, ii) how Mr. Trump’s plan and the GOP Blueprint for tax reform address repeal, iii) the legislative hurdles to repeal and iv) the “permanence” of any legislation.

 

With all of the uncertainty surrounding the future of the transfer tax system, many clients will consider delaying planning because it seems like a prudent course.  It is important however that they understand the substantial cost of delay in terms of wealth transferred to the family.  This analysis utilizes a financial model to evaluate and understand these costs.  It looks at a few possible, and arguably likely, repeal scenarios based on a set of reasonable assumptions as to the future.  There are three essential takeaways from this analysis and from the prior newsletter, Estate Planning Newsletter #2492:

 

·       The cost of delaying planning measured by the amount of wealth transferred to the clients’ family at life expectancy is substantial and dramatic. 

·       It is essential that clients and advisors understand this cost of delay as well as take into account the many non-tax reasons for planning in order to make an informed decision whether or not to plan currently.

·       Due to the uncertainty around future transfer tax laws, it is important to consider flexible planning strategies and trust arrangements and site trusts in states with favorable decanting and other laws.

 

 

 

HOPE THIS HELPS YOU HELP OTHERS MAKE A POSITIVE DIFFERENCE! 

 

 Robert Finnegan

 

CITE AS: 

LISI Estate Planning Newsletter #2526 (March 14, 2017) at http://www.leimbergservices.com   Copyright 2017 Leimberg Information Services, Inc. (LISI).  Reproduction in Any Form or Forwarding to Any Person Prohibited – Without Express Permission.

 

Copyright © 2017 Leimberg Information Services Inc.