The tax law passed at the very end of 2017 has left many clients and advisors wondering about current estate planning needs:

  • Now what?
  • Does it affect me?
  • Do I need to take action regarding my planning?

The short answer is – probably!

We work with wonderful clients who think that once we’ve helped them craft their plan to achieve their dreams, they can just put that plan in a drawer and forget about it.  We always urge them to keep it handy.  As the world changes, their needs will change and therefore their goals will change.  Their plan is not meant to be “one and done.”  Think of it like a living document.

And, amazingly, a vast majority of high net worth clients have not done as much planning as you’d expect. Outside of a will, or maybe some basic living trust, they’ve gone no further.  And worse, even that limited planning likely hasn’t been updated in years!

Why is that a problem?  Well, does it take into account the huge changes one can leave their surviving spouse?

A quick illustration of where a review can change everything:

For many years, wills were written to say: “I want to leave the maximum amount allowed by law to my spouse to be placed in a Credit Shelter Trust.”  Sounds great right?  Well, the amount one can leave has gone up over the years from $600,000 to $1,000,000 to $3.5MM to over $5MM to now over $11 million.

So, what if their estate is worth $7 million?  Based on the above-outdated language, the will directs that the maximum amount allowed by law be passed to the spouse in that Trust….But wait.  That means their entire $7MM estate will be placed in Trust since the current law allows for up to $11.18MM.

Is that what you wanted??  Very likely not. It was likely written when the exemption amount was only $1 million, or even $600K.

Point of all this is that planning is critical. Planning brings peace of mind. Planning allows YOU to achieve your dreams.  It’s your plan.  You can design it any way you like. The key is to do the planning!

And that’s where we come in to help! Are you ready to review your client’s current plans and make sure they are up to date and still working towards their goals?  Have your clients done enough planning thus far?  Fill out our contact form.

Mercury Financial Group does not provide tax or legal advice. All clients are urged to seek counsel on such matters.