All the changes in the tax rules, such as changes in cost basis calculations and gift tax exemptions, will likely affect wealth transfers.
And those changes don't even take into account the possible income tax increase in 2011. Though income taxes have little to do with estate taxes, they can't be dismissed entirely. The issue has become a political football, and if legislation stalls, taxes could rise across the board at all income levels. But it's the wealthy in particular that have been targeted for heftier increases by the Obama administration.
Tina Davis Milligan, a partner at Baker Tilly Virchow Krause LP, an accounting firm in Chicago, believes there are tax advantages to giving now rather than later. But she has some clients who want to accelerate their deductions this year since they realize their charitable deductions won't be reduced.
"This would not normally be the intuitive thing to do," says Milligan. "You would have thought they'd see a larger tax benefit in tax deduction next year when tax rates are higher, but because their deductions would be limited next year, they're going to give more this year instead of next year."
This year, next year. It all depends, of course, on each client's individual time table.
Mary Ann Mancini, a partner at the law firm Bryan Cave in Washington, D.C., and leader of the firm's private client group, says most of her clients do their charitable giving during their lifetime to reduce the income tax burden.
"If they feel income tax rates are going to rise next year," says Mancini, "they are likely to do their charitable giving next year and not this year when rates are low.
"Obama is talking about keeping rates low but not for the wealthy, and it's the wealthy who do so much charitable giving, so there's no reason for them to make charitable gifts this year because for them, even if Congress does something, it's likely their income taxes are going to go up."
All these shifts provide plenty of opportunity for advisors to step up to the plate. The Merrill Lynch Cap Gemini World Wealth Report 2010 shows a rising demand for philanthropy-related advisor services among high-net-worth individuals because they increasingly view philanthropic choices as inextricably linked to their broader financial planning initiatives.
As a result of this changing landscape, many donors are reconfiguring their giving and asking their advisors to join with estate planners, tax advisors and accountants in client-centered teams to facilitate the process. The murkiness is affecting not only the very wealthy but a much broader swath of the less affluent that need advice from planners.
"This isn't something that just affects billionaires," says Haefele. "There is opportunity here to help a level of client-someone with $1 million to $5 million in assets who perhaps thought they would not have to worry about these things. They will need an advisor to navigate the confusion and shed some light on the best route forward."