The Practical Planner: Live from Heckerling – Trusts, Taxes & Conference Insights
Episode Release Date: January 22, 2025
Host: Thomas Kopelman
Guests: Anne Rhodes & Dave
Production: wealth.com
Introduction
In this live episode of The Practical Planner, hosts Thomas Kopelman and Anne Rhodes are joined by guest Dave at the prestigious Heckerling Estate Planning Conference in Florida. Despite appearances suggesting otherwise, the trio remains cool and focused on delivering valuable estate planning insights to financial advisors aiming to enhance client service and business growth.
Integrating Estate Planning into Clients' Lives
Thomas Koppelman opens the discussion by addressing a common challenge: making estate planning actionable and integrated into clients' lives. He highlights a scenario where high-net-worth clients receive comprehensive estate plans but fail to implement them effectively.
"It's super good to have this idea and this plan, but if it just stops at the here's the delivery and the explanation, most times we're gonna find that nothing gets done."
— Thomas Koppelman [00:00]
Anne Rhodes echoes this sentiment, emphasizing the importance of translating complex tax codes and legal jargon into practical, relatable advice that clients can understand and act upon.
Insights from Heckerling Conference
The conversation shifts to the value of attending industry conferences like Heckerling, where Anne points out that while clients might find detailed tax discussions overwhelming, advisors can extract actionable anecdotal knowledge to benefit their clients.
"These speakers who are just very highly regarded in the industry and have a lot of knowledge... give you value that you can bring back."
— Anne Rhodes [01:48]
Dave adds that maintaining advisor involvement is crucial, especially when dealing with irrevocable trusts, as these structures require ongoing management and understanding of potential IRS risks. He underscores the importance of staying informed about legislative changes and audit risks.
"Irrevocable trust has to live its life, right?... you have to make sure the client understands what they're getting into."
— Dave [03:08]
Tax Law Changes and Implications
A significant portion of the discussion revolves around the Tax Cuts and Jobs Act and its impending sunset on December 31, 2025. Dave explains the complexities of budget reconciliation and its impact on extending tax provisions.
"The only way to get an extension passed is to go through this budget reconciliation process."
— Anne Rhodes [05:52]
Dave further clarifies that completely repealing the estate tax would necessitate offsetting revenue from other areas, making such a repeal unlikely in the near future. He advises advisors to prepare clients for potential extensions of the current tax provisions, which may have limited durations.
"Is it likely to happen? No... likely we will have an extension of the Tax Cuts and Jobs act, but it will be limited..."
— Dave [08:55]
Thomas emphasizes a cautious approach, suggesting that advisors should discuss potential strategies with clients but refrain from making definitive plans until legislative outcomes are clear.
"Maybe have the conversations about it, but don't really make any decisions until we see what happens."
— Thomas Koppelman [10:52]
Trust Structures and Risk Management
The hosts delve into the nuances of grantor versus non-grantor trusts, highlighting the importance of cash flow management and the potential tax implications of each structure.
Dave advises on the careful consideration required when opting for grantor trusts, especially for clients with significant real estate holdings.
"If liquidity is an issue for your client because they're real estate rich, just be aware of that."
— Dave [15:55]
He also warns about the risks associated with debt in grantor trusts, which can lead to unexpected tax bills if not properly managed.
"If there's debt in excess of the basis for the assets inside of that trust, just be careful because you could actually have recognition of gain."
— Dave [15:56]
Anne brings up Qualified Personal Residence Trusts (QPRTs) as valuable tools for high-net-worth individuals but cautions about IRS scrutiny regarding the legitimacy of lease agreements post-term expiration.
"The IRS is looking really closely at... is it really arm's length?"
— Anne Rhodes [18:54]
The Value of In-Person Conferences Over Virtual Meetings
As the conversation nears its conclusion, Thomas and Anne discuss the unparalleled benefits of attending in-person conferences. They argue that such events foster deeper connections and provide learning opportunities that virtual platforms cannot replicate.
Thomas shares personal anecdotes about spontaneous, meaningful interactions at Heckerling that wouldn't occur over virtual meetings.
"Conferences create this environment where those one on ones do get to happen."
— Thomas Koppelman [22:06]
Anne concurs, noting that face-to-face interactions often lead to more substantial and productive professional relationships compared to virtual exchanges.
"More gets done... at conferences like this than, you know, virtually over a long period of time."
— Anne Rhodes [21:10]
Dave praises Heckerling as the pinnacle of estate planning conferences, offering both high-quality educational content and invaluable networking opportunities with industry luminaries.
"Heckerling is basically the pinnacle in terms of conference quality for estate planners."
— Dave [22:06]
Conclusion
Wrapping up the episode, the hosts reiterate the critical takeaways:
- Integrate and Implement: Estate plans must be actionable and integrated into clients' lives to ensure effectiveness.
- Stay Informed: Continuous education through conferences and industry events is essential for staying abreast of legislative changes and best practices.
- Manage Risks: Advisors must carefully navigate trust structures and tax implications to mitigate risks for their clients.
- Value In-Person Networking: Despite the rise of virtual interactions, in-person conferences remain irreplaceable for meaningful professional growth and connections.
Thomas thanks Anne and Dave for their invaluable insights from the Heckerling conference and encourages listeners to rate and subscribe for more practical estate planning wisdom.
For more insights and detailed strategies on effective estate planning, tune in to future episodes of The Practical Planner.