Planning in the Headwinds of Change

Charlie Douglas, JD, CFP®, AEP®, Editor
Email: editor@naepcjournal.org
Phone: 404.279.7890

This past Labor Day our family promptly backed away from a holiday at the Gulf Shores in the face of Tropical Storm Lee and its torrential rains. Plans for an exciting beach vacation hurriedly changed when rain-soaked weather beyond our control forced us to fight the boredom of a “staycation” at home.

Similarly, long-term planning for our clients with less than a year and a half remaining under the Tax Reform Act of 2010 is often exacting and uncertain. Our best planning efforts can be thwarted by ambiguous change and many unforeseen circumstances beyond our control.

Unpredictable and changeable financial headwinds abound, making an already challenging planning environment that much more difficult. Clients and planners alike are understandably anxious about the lack of firmness in our economic foundation and their financial future. Things that we long took for granted are no longer true.

For example, during recent years many of us thought that real estate could not drop dramatically, sovereign debt would remain healthy, investment banks would continue to survive and thrive, and that we could always count on the USA for its AAA rating. Many of us were wrong.

We now find ourselves forced to plan in the “new normal,” yet there is nothing normal about these times. Pointedly, there is nothing normal about a government which borrows more that 40 cents for each dollar it spends, three years of consecutive trillion dollar deficits, or a real estate market that has lost more than 33% from its peak and is now worse than the Great Depression.

Planning, particularly over the long term, does not occur in a protective vacuum. It, too, is affected by political brinksmanship, our failure to deal with our mid-term structural deficits in the form of entitlements and the conundrum of reducing our dependence upon debt, while at the same time seeking to grow a stagnant economy.

This 3rd quarter edition of the Journal embraces the planning headwinds of change by highlighting the most recent developments during these uncertain times, as well as proffering an informed outlook for the estate planner’s future. From thoughts on reducing estate and trust litigation, to avoiding trustee liability in cases where a trust lacks liquidity, to the important role of life insurance within the estate planning industry, this edition is packed with pointers from our industry’s best and brightest minds.

Thank you to all of our content partners for selflessly sharing the best-in-class content that makes the Journal something special and a valuable go-to resource for estate planners.

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Charlie Douglas, JD, CFP®, AEP® has practiced in the business, tax, estate and financial planning areas for over 25 years. He holds a J.D. from Case Western Reserve School of Law and possesses the Certified Financial Planner® and an Accredited Estate Planner® designation. As a senior vice president for a leading global wealth management institution, Charlie specializes in comprehensive planning solutions and trust fiduciary services for business owners, high net-worth individuals and their families. Charlie is a board member of the National Association of Estate Planners & Councils (“NAEPC”) and is the current editor of the NAEPC Journal of Estate & Tax Planning.

This information is provided for discussion purposes only and is not to be construed as providing legal, tax, investment or financial planning advice. Please consult all appropriate advisors prior to undertaking any of the strategies outlined in this article, many of which may involve complex legal, tax, investment and financial issues. This communication is not a Covered Opinion as defined by Circular 230 and is limited to the Federal tax issues addressed herein. Additional issues may exist that affect the Federal tax treatment of the transaction. The communication was not intended or written to be used, and cannot be used, or relied on, by the taxpayer, to avoid Federal tax penalties.