And now we take action, right?  What am I talking about?   I’m talking about (finally) taking action on your planning.
For the past 2 years we’ve heard countless clients say, “Hey, I get it. I know I need to do my estate planning but I’m not doing anything until I see what the tax law will be.”  Well, now we know.

What we know is:  the estate tax did not go away. 

So, even with a Republican-controlled House, Senate, and White House the estate tax still did not get repealed.  Most experts agree, given those circumstances, that this was the best chance of ever getting it repealed.  These same experts now agree, that the tax is HIGHLY likely to be with us for a long time given the above.

So, what does this all mean?

Most estate planning attorneys agree that life insurance is an effective part of any quality estate plan.  Generally, the insurance is used as a very efficient means to pay the estate tax.  Think, paying it with pennies, not dollars.  Clients who have been presented insurance as part of their plan, but who held off waiting out the tax law change, now need to move forward.  As we all know, insurance does not get cheaper as you age.  So, the time to act on this really is now.

Some good news: although the estate tax did not go away, we were given a window to do some very exciting things that we won’t be able to do in just a few short years.  The tax act gave us double the gift exemption.  So, instead of $5.49 million to gift per person, we now have close to $11 million to gift.  However, this window closes in 8 years, if not sooner.  Therefore, most planners, attorneys, and ourselves included are urging clients to take advantage of this incredible gifting opportunity by taking action now!

On top of that, the rates the IRS publishes for planners to use with various trusts, GRATS, CRT’s etc. are slowly rising.  These rates have been at historic lows for almost a decade.  That window seems to be closing as the experts predicted and these interest rates will continue to rise making planning strategies that use these rates less attractive.  Said another way:  Time is running out.

Next Steps? 

Your next step is to go back to every client who has been sitting on their hands these past 2 years and re-engage them.  Your Mercury Planning Specialist is here, as your go-to planning partner, to help guide you and your clients on the proper path to accomplish all their goals.

Further Reading – The Power of Life Insurance: The Impact of a Tax-free Death Benefit

Are you ready to discuss solutions and re-engage your clients? 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.