I had the opportunity to attend the 57th Annual Heckerling Institute on Estate Planning, one the largest conferences for estate planning professionals. It was a great time to meet lots of new faces and run into some familiar ones. Our Chairman, Chris Mercer, and Andy Frew from our Houston office were also in attendance. As of this writing, I have not received the Yeti Cooler or nice bottle of bourbon I expected from the business cards I dropped off at the various booths.
This year’s week-long conference was the first to be held in person in a few years, and the exhibit hall and education sessions were full of good information and details on the estate, gift, and tax planning fronts. Below we share just a few topics of conversation and tidbits we picked up from the sessions and conference last week.
Estate Tax Exemption Uncertainty from Panel of Experts
Steve Akers with Bessemer Trust, Samuel Donaldson at Georgia State University College of Law, and Beth Shapiro Kaufman with Caplin & Drysdale delivered a “brief” three-hour, 285-page ‘dissertation’ on recent developments facing the estate planning community. Topics ranged from federal legislation, administrative and treasury guidance, transfer tax developments, valuation, and a bevy of other developments of interest. One interesting back-and-forth included the panelists’ opinions on the current gift and estate tax exemption, set for 2023 at $12.92 million for an individual but expected to halve on January 1, 2026. The panelists were split; Mr. Donaldson believed the exemption wouldn’t drop that far, and historical trends point to a higher exemption. But Ms. Shapiro made an important caveat: the current legislation sunsets, i.e., it would require congressional action to keep the exemption as is (or change from its current course). With the current trend of Washington, the panel was less than optimistic about much of anything happening for at least the next few years.
Document and Design Your Gifts Carefully
There were a few sessions on how to carefully design and document your gift transfers (including charitable ones) to meet the grantor’s wishes and avoid a second look from the IRS. Alan Rothschild with Page, Scrantom, Sprouse, Tucker & Ford, P.C. provided some good pointers on crafting charitable gift agreements, highlighting that a well-drafted charitable gift agreement can protect both the donor and charity and ensure that a situation doesn’t end up in litigation.
Stephanie Loomis-Price with Perkins Coie LLP and Christine Wakeman with Winstead PC wrote on recent developments in audits and case law related to privileges applicable to estate planning. The session covered strategy in audit responses related to transfer tax returns for privately held interests. To summarize at least part of their legal advice: understand the rules and protections around communication with your attorneys and document the reasons and goals for the transfer.
Valuation Practitioners See More Gift and Estate Planning Ahead
Mercer Capital and a number of valuation professionals and independent valuation shops attended the conference, and the ability to chat with other practitioners is always a plus. A non-scientific study of the professionals I spoke to saw gift and estate work plateauing from the flurry of activity experienced in 2021 (consternation from the changes proposed in the now-deceased “Build-Back-Better” bill). However, as the calendar turns to 2026, practitioners are seeing more and more gift and planning work fed into the hopper. As we’ve written previously, current market volatility creates a good gift and planning opportunity for the family business in it for the long haul, especially with gifts made now not subject to clawback in the future if the combined exemption is reduced.
Bonus: Sunshine State Update and Final Thoughts
Florida, with friendly tax and trust rules and regulations, punches above its weight at Heckerling (never mind it is held in Orlando in January). Shane Kelley with Kelley & Kelley, P.L., Elaine Bucher with Gunster, and Sarah Butters with Ausley McMullen, sat on a panel discussing the most important developments in Florida over the past two years that in-state and out-of-state practitioners should know. One highlight included an update on the Florida Uniform Directed Trust Act (FUDTA), signed in 2021. In layman’s terms, FUDTA allows a directed trust officer to handle trust administration while your financial advisor or other professional handles asset allocation, investment, and administration. This brought Florida into an even more friendly trust regime and should allow everyone to lean into their core strengths: trust professionals work on the trust side, and investment managers focus on investment management.
Conclusion
Mercer was glad to be back at the Heckerling conference, meeting new friends and connecting with old ones. Our professionals aim to keep their ears to the ground on gift and estate tax issues and help our clients, both family and not, avoid any headaches with their estate plans. We’ve been providing objective valuations for tax compliance since 1982 and have seen a few things. Let us know if we can help with your gift and estate tax compliance needs.
