Back to Basics

Underlying much of the talk at Heckerling is the fact that, with the federal exemption likely to remain so high, fewer clients will need the sort of sophisticated estate-planning techniques that have been the mainstay of past Heckerlings.

Dennis Belcher noted that "In 2007, 38,000 estate tax returns were filed. The IRS is projecting that 15,000 less returns will be filed with the estate tax exemption amount at $3.5 million." And at the current estate tax exemption amount of $3.5 million, a couple will be able to take advantage of a $7 million estate tax exemption.

That, says Jacobs, "coupled with the fact that the estates of many people were depleted by 30 to 40 percent as a result of the stock market crash" will lead people to turn to what she called "low-tech" estate-planning techniques.

One such technique got attention during Marcia Chadwick Holt's session, "Do You Want Tax Free Distributions? Try Roth IRAs and Roth Accounts."

Holt presented a step-by-step guide on how to convert a traditional IRA to a Roth IRA, while emphasizing her practice pointer: "A Roth IRA is an excellent vehicle for passing on wealth to the next generation free of income tax. If the surviving spouse's goal is to leave the largest amount to their children after income tax, the Roth IRA beats the traditional IRA."

Better still is a Roth contribution to a designated Roth account in a 401(k) plan, said Holt, who is based in Denver, of counsel to Davis Graham & Stubbs and a member of Trusts & Estates' advisory committee on retirement benefits.

Another estate planning basic technique that received attention (during the recent developments session) is the notion that if you are a trustee, you should be very careful about the assets you are entrusted with and understand the consequences of keeping those assets at certain institutions.

Of course, this is estate planning 101. But Gail E. Cohen, the New York-based head of Global Wealth Management for Fiduciary Trust International, said she's not surprised that something so basic was mentioned during a panel devoted to current developments. "This reflects the impact of the terrible year in the markets and the Madoff scheme," said Cohen, a member of Trusts & Estates' advisory committee on fiduciary professions. Clearly it's time to check three, maybe four or five times that every "i" is dotted and "t" crossed.

Marketing Matters

Despite people's dwindling bank accounts and the higher federal exemption, people with any means still are going to need estate plans, because of such issues as incapacity, taxes and asset protection.

Trouble is, they may not know it. That means estate planners need to school, or re-school themselves in marketing. And that's often a difficult task for lawyers taught to sniff at mass-market outreach.

Little wonder then that, among the nearly 150 exhibitors at the Heckerling conference, Jay Foonberg, law firm marketing guru and author of How to Get and Keep Good Clients, was hawking his wares. To journalist Deborah Jacobs at least, Foonberg's message was clear. He's telling estate-planning lawyers everywhere: You guys need me, whether you realize it or not.