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UC Goering Center news

The basic and the bold: Estate planning for now and the future

By Lee Stautberg

The recent pandemic, executive orders, and sheltering in place have everyone thinking about and implementing plans. Businesses quickly mobilized workforces to work from home. Essential businesses learned how to work in physical proximity while implementing social distancing, increased sanitation, and other safety measures. We have visited the homes of our colleagues, friends and families as we have met virtually. I can definitely say that grey is a popular wall color and there are some really cute pets out there. Some of us have learned to bake bread and sew masks. Grocery store shelves have been depleted. I suspect there are folks out there who have a two-year supply of toilet paper in their basement.

Attorneys are no longer wearing the dark suits surrounded by all of the accoutrements found in office settings. In those states that have not adopted remote witnessing for wills and other documents, we are wearing masks, plastic gloves and taking other preventative measures while witnessing the execution of documents – at least six feet away from our clients. Meetings with clients take on the look and feel of surgical procedures. My colleagues and I are assisting clients to execute their basic and sophisticated estate-planning documents during makeshift signing sessions in driveways and on patios.

As the pause button has been hit on our daily lives, many of us have the time to think deeply about our own planning. Who would be the holders of our health care directives? What are our end-of-life decisions? Do my adult children have health care directives? Do I have the appropriate estate plan? Do I have a business succession plan?

The basic documents of a health care power of attorney, living will, and financial power of attorney provide immediate guidance to one’s family. When you appoint someone to make your health care decisions when you cannot or to direct your end-of-life decisions, this direction is a gift to your family by relieving their burden of guessing what you wanted. A financial power of attorney can allow your personal business to move forward even if you cannot personally attend to it yourself. These basic documents are simple, inexpensive, and important.

The silver lining of the economic coma is that this is an unprecedented time to transfer business interests and assets to the next generation. Valuations are low and federal interest rates (used in gifting techniques) have fallen to historical lows. In addition, the federal estate tax exemption per person is $11,580,000. Remember that the federal estate tax exemption is set to return to $5,000,000 (adjusted for inflation) after Dec. 31, 2025. This makes it a unique time to consider succession planning and wealth transfer.

The techniques of such transfers could include simple gifts to family members or more sophisticated techniques using tools such as Grantor Retained Annuity Trusts (GRATs), Grantor Retained Unitrusts (GRUTs), Qualified Personal Residence Trusts (QPRTs), sales to other forms of trusts that meet the requirements to remove assets from one’s estate for estate tax purposes, and many other techniques. If you are charitably inclined, the low federal interest rates make wealth and charitable giving techniques such as charitable lead trusts appealing.

A well-thought-out plan is a gift to your family, friends, and the charities you support. Whether your estate plan is basic or bold, there has never been a better time or reason to implement one.

Lee Stautberg is a partner at the law firm of Dinsmore & Shohl.  She directs her primary attention to the needs of privately held businesses and their owners, serving as attorney and trusted adviser on business, succession planning, estate planning, and tax issues.

Featured image at top: Vadim Kaipov/Unsplash

About the Goering Center for Family & Private Business
Established in 1989, the Goering Center serves more than 400 member companies, making it North America’s largest university-based educational non-profit center for family and private businesses. The Center’s mission is to nurture and educate family and private businesses to drive a vibrant economy. Affiliation with the Carl H. Lindner College of Business at the University of Cincinnati provides access to a vast resource of business programing and expertise. Goering Center members receive real-world insights that enlighten, strengthen and prolong family and private business success. For more information on the Center, participation and membership visit goering.uc.edu.