Estate Tax Exemption Uncertainty
And Other Takeaways from the Heckerling Estate Planning Conference
Mercer Capital had the opportunity to attend the 57th Annual Heckerling Institute on Estate Planning, one of 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 a few topics of conversation and tidbits we picked up from the sessions and conference.
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” threehour, 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.
