The future of taxation in the U.S. is still unknown at the time of this writing, as the GOP tax reform plan wends its way through a gauntlet of dizzying political jockeying in Congress.
The stakes are great, as this isn’t an ordinary tax-cut plan. In addition to the usual objects of attention—the corporate tax rate and the estate tax, to name a few—the reform plan’s potential impact extends beyond the pocketbook, to areas such as education, health care, social services and charitable giving.
It’s safe to say that everyone will be affected in some way if the tax plan is approved.
It amounts to a lot of uncertainty about a lot of aspects of American life—in other words, an environment in which planners are most sorely needed and appreciated.
This is especially true of estate planners, who are a special focus of this issue of Private Wealth. Estate planners will no doubt be busy in the coming months trying to realign their strategies to deal with yet another set of rule changes. But they should be used to this routine by now. The political battle over the estate tax, for example, has been going on for decades, seemingly swinging back and forth every time a new occupant enters the White House.
As you’ll see in this issue, it’s not the uncertainty that kills an estate plan and sparks dramatic family feuds. It’s usually the failure of planners to make sure their plans have all their clients’ bases covered. Basically, it’s about asking the tough questions of your clients.
In our main cover story, reporter Leila Boulton thoroughly covers the estate-planning oversights that led to some of the most famous family blowups in history. Many of these tales are truly remarkable, full of family intrigue, nastiness and pettiness. But also remarkable is the fact that many of the family battles were not due to flaws in the fine print of their estate plans, but an absence of common sense on the part of planners.
All it would have taken to avoid a family war in a lot of these high-profile cases was a simple nudge, the asking of an obvious question or a single gathering of benefactors and inheritors to clear the air. Is a client leaving some of his or her children out of the will, the way comedian Jerry Lewis did? Well then, it might be a good idea for estate planners to have the benefactor explain exactly why they were cut out in writing, which Lewis didn’t do. Is there reason to believe a client has hidden offspring that his “public” family knows nothing about? It’s a touchy subject, but one that estate planners need to bring up to avoid the disaster that was journalist Charles Kuralt’s estate.
Then there are cases like Prince and Howard Hughes, where planners can best serve their clients with a more basic question: “Do you have a will?”