Family Drama Causing More Headaches for Estate Planning Professionals than Tax Reform, according to TD Wealth Survey

drawing of family on cash

March 28, 2018 - Consumer Insights DC, DE, MD, VA Florida Maine New England New Jersey, New York and PA North and South Carolina

Estate planners and advisors have a surprising second job: family therapist. In fact, 44 percent of planning professionals identified family conflict as the biggest threat to estate planning this year, followed by tax reform (25 percent), and market volatility (12 percent), according to the latest survey by TD Wealth. Additionally, over half (53 percent) shared that guardian and beneficiary designations are the most difficult document for clients to tackle when building an estate plan; with Current Will (17 percent) and Power of Attorney (16 percent) vying for second.

“Losing loved ones can be difficult, and talking about what happens when a loved one is gone can be even tougher. We encourage families to start the dialogue early, and make sure they have the right people around the table from the beginning. That includes financial advisors, tax advisors, lawyers, accountants, and family members," said Ray Radigan, Head of Private Trust at TD Wealth.

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Nothing Certain, even Death and Taxes

The Tax Cuts and Jobs Act is getting mixed reactions from estate planners. Nearly half (49.5 percent) believe tax reform will help clients, while 34 percent aren't sure and 16 percent anticipate a negative impact.

“The Tax Cuts and Jobs Act brings about the biggest tax reform change we've seen in years, and for those planning an estate, it may introduce an opportunity to potentially reduce future transfer taxes,” continued Radigan. "While uncertainty may continue in the near-term, it's important to review your trust and estates plans with your financial advisor and tax advisor sooner rather than later, to ensure you and your family are prepared when the time comes."

Gearing up for the Generational Wealth Transfer

Despite the uncertainty, nearly three-quarters of estate planners agreed that clients will benefit most from wealth transfer tax changes – including estate, generation-skipping, and gift taxes. 

Thirty-six (36 percent) of those surveyed believe clients will see the biggest benefit from new estate tax laws, followed closely by generation-skipping tax (28 percent), and gift tax (13 percent) updates. Planners also expect certain clients to potentially benefit from other elements of the reform, including:

• State transfer tax (11 percent)
• Corporate pass through tax (7 percent)

“The final legislation temporarily doubles the exemption for estate tax, leading some to assume estate planning may no longer be necessary. That couldn’t be farther from the truth," said Radigan. "With such significant changes to wealth transfer taxes, it's more important than ever that individuals and their families come together to develop a cross-generational financial plan.”

Survey Methodology

The total sample includes 109 survey respondents who attended the 52nd Annual Heckerling Institute on Estate Planning, including attorneys, trust officers, accountants, charitable giving professionals, insurance advisors, elder law specialists, wealth management professionals, educators and non-profit advisors. The survey was fielded January 24-25, 2018.


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