The Practical Planner: Live from Heckerling – Trusts, Taxes & Conference Insights

Released on January 22, 2025

In this episode of The Practical Planner, hosts Thomas Koppelman, Ann, and Dave delve deep into effective estate planning strategies, insights from the Heckerling conference, and the evolving landscape of trusts and taxes. Filmed live at the Heckerling conference in Florida, this episode provides actionable advice for financial advisors aiming to enhance their estate planning services and grow their businesses.

1. Integrating Estate Planning into Clients' Lives

Thomas Koppelman opens the discussion by addressing a common challenge: ensuring that estate plans are not just delivered but actively integrated into clients' lives. He shares a pertinent example:

"I actually yesterday was meeting with one of my high net worth clients and delivered a plan... They've done nothing in two years."
[00:10]

Thomas emphasizes the importance of ongoing support and implementation to prevent estate plans from becoming stagnant documents that clients overlook.

2. Anecdotal Insights from the Heckerling Conference

Dave highlights the value of attending specialized conferences like Heckerling, where advisors gain nuanced, anecdotal knowledge that isn't easily accessible through standard resources:

"These speakers... provide insights into... risks as far as an audit?"
[01:48]

He underscores that while clients might not grasp the intricate details of tax codes presented at these conferences, advisors can extract valuable strategies and risk assessments to inform their practice.

3. Navigating the Tax Cuts and Jobs Act Extinction

The conversation shifts to the impending sunset of the Tax Cuts and Jobs Act (TCJA) on December 31, 2025, and its implications for estate planning. Ann elaborates on the physical manifestations of tax law changes and their real-world impacts:

"The tax exemption that's been doubled and what that means for clients... currently 13.99 million per US person."
[05:52]

Dave provides a detailed explanation of the legislative processes affecting the TCJA:

"The way that the Tax Cuts and Jobs act was actually implemented was through a process called budget reconciliation."
[08:55]

He explains that extending the TCJA requires passing it through budget reconciliation, which limits the duration of extensions and likely leads to another sunset after an additional term.

Ann adds:

"Minimizing some other planning strategy potentially... it's not likely to happen."
[10:52]

She advises advisors to encourage clients to plan proactively rather than delaying decisions, emphasizing the uncertainties surrounding future tax laws.

4. Strategies for Trust Management

The hosts explore various trust structures, their benefits, and potential pitfalls:

• Grantor vs. Non-Grantor Trusts:
  Ann warns about the liquidity issues associated with grantor trusts, especially for clients with significant real estate holdings:

  "If liquidity is an issue... a non grantor trust that's paying its own taxes might be better for that client."
  [15:55]

  She advises advisors to perform comprehensive cash flow analyses to ensure clients can meet tax obligations.

• Qualified Personal Residence Trusts (QPRTs):
  Dave discusses the strategic use of QPRTs to remove real estate appreciation from an estate while allowing the grantor to reside in the property:

  "It's a great tool to get the appreciation out of the estate... but the IRS is looking really closely at... this is a contract."

[16:44]

He cautions about IRS scrutiny to ensure such arrangements are genuine and arm's length.

5. The Enduring Value of Conferences for Advisors

The episode shifts focus to the broader benefits of attending conferences like Heckerling:

• Networking Opportunities:
  Thomas shares personal anecdotes about meaningful connections made at conferences that aren't feasible through virtual meetings:

  "Conferences create this environment where those one on ones do get to happen."

[18:53]

• Educational Value:
  While some conferences may focus on networking, others offer substantial educational content that can enhance advisors' knowledge and business practices.

• Mentorship and Professional Growth:
  Ann recounts interactions with industry veterans, highlighting the importance of continuous learning and adapting to advancements in estate planning:

  "Estate planning does feel antiquated, but it could... when you think of how far this field has come."

[22:06]

6. Key Takeaways and Final Thoughts

Thomas wraps up the episode by reinforcing the importance of proactive estate planning and the strategic use of conferences for professional development:

"Super smart. Any other points from the conference that you guys feel like people need to hear about?"
[15:55]

The trio encourages advisors to leverage the insights gained from events like Heckerling to provide superior service to clients and stay ahead in the ever-evolving landscape of estate planning.

Notable Quotes

• Thomas Koppelman [00:10]:
  "I think this is an important topic to talk about because... if it just stops at the here's the delivery and the explanation, most times we're going to find that nothing gets done."

• Dave [01:48]:
  "They can do through budget reconciliation... it's probably not going to be, there's no estate tax or there's a really high threshold forever."

• Ann [10:52]:
  "If your clients are waiting to take that wait and see approach, sure, they can go ahead and do that. We're expecting the earliest that something would get done is probably April this year."

• Ann [15:55]:
  "Always worry about the cash flows as a system. So think about your client and that trust as a system together."

• Ann [22:06]:
  "When you think of how far this field has come, it really is at conferences like this that you get the latest and greatest of what people are thinking."

Conclusion

This episode of The Practical Planner serves as a comprehensive guide for financial advisors navigating the complexities of estate planning amidst changing tax laws and the strategic management of trusts. The insights from the Heckerling conference underscore the necessity of continuous learning and proactive client engagement. Advisors are encouraged to integrate practical estate planning seamlessly into their clients' lives and leverage professional gatherings to stay informed and connected in the industry.

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