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Oxford Financial Group, LTD


Oxford Financial Group, LTD


Expert Perspective

News, research and market insights from our team of experts.


Current Issue | December 20, 2018

Withstanding the Whipsaw

By: Julia Weaver, J.D., LL.M., Director, Family Office Services & The Trust Company of Oxford

The whipsaw of a frequently changing estate tax regime can distract families from the fundamentals of sound estate planning. With three major changes to our estate tax laws since 2000, and yet another tax reform bill pending, many families are feeling the whipsaw now more than ever. What has remained indisputable, however, is the enduring value of legacy estate planning, despite the estate tax du jour.

Steady the Course

Estate tax exemptions will rise. Estate tax exemptions will fall. Rather than chasing estate tax laws, we encourage families to evaluate their non-tax motivated goals and objectives. Interestingly, most families quantify the success of their estate plan not in terms of tax savings, but in terms such as:  

  • Leveraging wealth to create family unity
  • Identifying shared, cohesive legacy goals
  • Fostering financial leadership in their heirs
  • Developing a legacy of benevolence or business acumen

We might call this "mastering wealth", and sound planning should address all of these goals and objectives.  

Stay Flexible

As we discussed in our April 2017 article, "The Enduring Value of Sound Planning", we continue to encourage families to enhance their estate plans with flexibility. This enables a sound plan to thrive in any tax landscape or with a family’s changing personal and financial situation. Additionally, the asset protection afforded by certain tax-motivated trusts remains a worthy goal regardless of the tax regime. Asset protection planning should be given its own center stage in a family's planning considerations.

Don't Stop Planning

Should either (or some compromise of) the House or Senate bills be enacted, the estate planner's mind invariably dreams of strategies to leverage an increased estate tax exemption. Both bills (as of the date of this writing) propose to essentially double the current estate tax exemption from $5.6 million per person for 2018 to $11.2 million per person. For married couples this could result in a total estate tax exemption of $22.4 million1. The thoughtful planner will immediately see opportunities such as upstream planning, the technique of utilizing upstream generations for basis step-up planning. Pass wealth up, step up the basis on the way down. The capital gains tax savings can be tremendous.

This is but one example of the value of smart, strategic wealth planning. The right team of advisors will always find ways to maximize tax efficiency in any tax regime.

Plan with Confidence

Our Oxford team of experts know today's most cutting edge planning techniques to maneuver through any tax law changes. Together with your entire team of advisors, we apply the steady fundamentals necessary to build an enduring estate plan.

1The House bill, however, proposes a permanent repeal as of January 1, 2024, while the Senate version would continue the current estate tax regime albeit with an increased exemption. These differences must be reconciled, but both would continue to allow a step-up in basis upon death.

The above commentary represent the opinions of the author as of 11.15.17 and are subject to change at any time due to market or economic conditions or other factors.