At the Alchemia Group we are helping our clients think & act differently in regards to their wealth and its impact on thier family - because we know it is more than just numbers and plans, it's the Balance of Art & Science with Pragmatism and Vision.

Change is Upon Us

John (Jeff) Scroggins recently posted a long article on the future of the estate planning profession. I try to avoid writing about professional topics but one quote and one section in his piece really resonated with me. It really hits the importance of ‘right focus’ when it comes to planning. Here’s the section and the quote is at the very end.

“Third, the purpose of estate planning is being reevaluated by many clients and their advisors. The pivotal reality is that estate planning is not fundamentally about taxes – or even about the assets clients intend to pass. It is about how clients deal with their inevitable death and potential incapacity. It is about clients trying to make the right decisions about their own mortality, the consequences of their passing and how to leave a positive LEGACY for their heirs.

This perspective starts with understanding that estate planning does not start with THINGS or the taxes imposed upon them. It starts with PEOPLE: Who clients were and are and who their families are and might become. In the last two decades the author has observed a significant re-orientation of both clients and advisors from believing that the protection and preservation of family assets (e.g., minimizing transfer taxes and asset protection) is the most important goal of estate planning. Increasingly, clients and their advisors recognize this is a misplaced emphasis which focuses both the client and the planner on assets rather than family and on structure and technique over family goals. When protecting and preserving the family’ becomes the beginning point of planning, clients first focus on how to leave a positive impact for their family. Both the client and the planner may be forced to deal with difficult family issues (for example, treating the descendants as individuals with their own personalities and problems, not as equals), which both the client and the planner might have preferred to ignore – to the ultimate detriment of the clients family.

It is not that tax issues are unimportant. They just pale in significance when compared to family issues. Instead of wrapping the estate plan around the tax issues, clients are increasingly starting with the family issues and then wrapping the tax issues around the family goals and needs.

Many clients (though clearly not all of them) have increasingly begun to address the issue of “how much is too much” – or as Warren Buffet said in a 1986 article in Fortune magazine: “The perfect inheritance is enough money so that they feel they could do anything, but not so much that they could do nothing.” As a result, affluent clients are increasing their charitable gifts and bequests as their assets grow.

Change is upon us. The question is how do we as estate planners adapt to it? There is a great quote by Eric Hoffer:

In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.”

This changing environment will bring incredible opportunities for the creative and the prepared. Those who fail to adapt will die off.”



Change is Upon Us