WHAT WILL BE MOST IMPORTANT TO OUR CLIENTS IN 2025?

Reflecting back over the 40 years of his estate planning practice, Jim would say the biggest change has been a shift in the focus of our clients’ main concern.

In the 90’s, the motivation for most clients was the dreaded estate tax that loomed over everyone who had an estate (including their life insurance) over $600,000.  Jim can recall the surprise (and horror) of young couples who each had a $500,000 life insurance policy and $200,000 equity in their home (a combined estate of $1.2 million) when he explained to them that without dividing their assets and creating separate (and complicated) trusts, their children faced the prospect of an estate tax of $235,000.

Today, our clients are glad to hear that an individual is not affected by any estate tax if their estate is under $5 million and a married couple need not be concerned at all about any estate tax as long as their estate does not exceed $10 million.  With the 2024 election completed, and with Republicans controlling the White House and Congress, there is virtually no chance for estate taxes to return as a threat anytime soon.

But the absence of the tax threat does not mean that the need for a proper estate plan is any less important.  Rather, for most of our clients, the focus has shifted from planning to avoid taxes and toward what is really important to them.  This often includes:

• Making sure that the person they want will be able to handle their affairs, and make health decisions for them if they become unable to do so
• Protecting their assets from their (and their spouse’s) dementia or senility
• Making it easier for the ones they leave behind to handle their estate when they die (including avoiding probate)
• Taking steps to ensure that the inheritance they leave to their children will be protected from a divorce, and that it will pass to their grandchildren if their child dies prematurely (what we like to call “Family Wealth Protection”)

For new clients, we explain the various ways they can achieve these goals, and help them decide the best option.  For most, our Revocable Living Trust Plan offers the best solutions.  They are comforted when we explain the flexibility that can be built into their plan, as well as the fact that it allows them to retain complete control over all of their assets and the ability to change anything at any time.

For clients who we worked with back in the days when a more complicated approach to avoiding taxes was necessary, a review of their plan is certainly warranted (if that has not already been done).  Those plans can be simplified and, in most cases, improved in terms of offering the Family Wealth Protection benefits that can be built into their plan.

As we approach the new year, we look forward to helping our existing clients, as well as those we will have the opportunity to work with in 2025.

If we can help you, please let us know.

James A. Hyatt
MaKayla Hanington