Bob Finnegan, Sr. Vice President, Advanced Planning Attorney with Highland Capital Brokerage spoke to an audience of high end financial advisors at the Elite Financial Advisor Conference on January 11 hosted by Janney Montgomery Scott. Bob addressed how current planning tools that were not adversely affected by the new 2017 tax act are ideally flexible and particularly suited to help clients hedge against all the threats to wealth, not just taxes—regardless of what happens in Washington.
With the passage of the Tax Cuts and Jobs Act of 2017 (TCJA) and the doubling of the gift, estate and GST tax exemptions, only the smallest percentage of clients are now subject to the estate tax and will continue to plan as usual. However, the tax act also sheltered a large group of high net worth clients from exposure to estate taxes on a temporary basis —over the next 7 years only– after which taxes may apply. Consequently, many of these clients, focused only on taxes, mistakenly feel they can defer planning and worry about it later. Moreover, if Democrats get control of Congress before the 7 years are up, many of the estate tax benefits from the tax act may go away earlier than 7 years. According to Bob, relying on a false sense of tax relief may not be wise and hedging against all threats to wealth may be more critical than ever.