Estate planning is an ongoing process, not a one-time transaction. While your core objective is to help your clients remain financially sound in the face of whatever comes their way, our core objective is to ensure a client’s estate plan works when it needs to.

Planning in a Fluctuating Political Climate
Estate plans need to change when your clients experience any major life changes, such as marrying someone new or welcoming a child to the family. But clients also need to respond effectively to large-scale legal and economic changes that are external to their personal lives. Regardless of your political leanings, it’s safe to say the United States is experiencing a period of dramatic legal, economic, and political change.

Elections like the 2018 midterms — and the resulting political change — often create fear and anxiety about how the impact of new laws and tax policy will affect your clients’ lives. You have undoubtedly seized the opportunity to help guide your clients toward the smartest financial decisions they can make in light of the results. When you help them navigate the ways the changing political landscape will affect their wealth, you’ll increase loyalty and retain more assets under management.

The Midterm Split: Democrats Won the House, Republicans Kept the Senate
Before the midterm elections, it was unclear how legislation like the 2017 Tax Cuts and Jobs Act would be affected. Now, we know that the House and Senate are split between Democratic and Republican control. As a result, the large-scale changes the Act brought may have an uncertain future.

So what does a divided government mean for your clients? The budget reconciliation strategy the Republicans used to pass the Tax Act will no longer be a viable option, which could slow any additional tax legislation supported by the Republican-controlled Senate. According to Kiplinger, “What is likely off the table with a Democratic House and Republican Senate is tax reform 2.0, which would make certain provisions of the 2017 tax law permanent, locking in individual and small business tax cuts. Social Security and Medicare reforms, which might have helped offset the effect of the tax cuts, are also likely off the table.”

Some Things Are Constant, No Matter Who’s in Charge
Amid so much political uncertainty surrounding the midterm elections, it’s important for your clients to remember there are many foundational constants in estate planning that are important no matter who’s in charge politically or what the tax laws look like. As part of your clients’ financial wellness team, we’re staying on top of the latest developments and will be here to guide them in matters of estate planning. We’re constantly watching the situation and will keep you and your clients informed of relevant legal and tax changes.

In order for your clients to grow and retain their wealth, careful estate planning is always a necessity — regardless of which party controls Congress. Many things may change, but a lot will remain the same: no one can legislate away irresponsible spending, divorce, lawsuits, bankruptcy, sibling rivalry, and the many non-tax reasons to complete estate planning.  An up-to-date comprehensive estate plan remains the best option for passing along a client’s wealth and values to the next generation.

We are here to help you and your clients in these changing times. Give us a call today.

Law Offices of J.R. Hastings • 1003 Third Street, San Rafael, California 94901 • 415-450-6692