The Future of the Estate Planning Practice --Topic of Probate Section Meeting

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By Roberta M. Gubbins

Legal News

"There has been an erosion of the estate tax planning practice," said Douglas A. Mielock speaking on the Future of Estate Planning at the ICBA Probate Section meeting on October 18th at the State Bar of Michigan.

This erosion, he explained,is due in part to the decrease in the estate tax imposed. In 2009, with a $3.5 million exemption, only three tenths of one percent of the population have to file an estate tax return; and "I would venture to say that now with a $5 million exemption, it is probably two tenths of one percent of the population that is subject to estate tax," he said.

In the 1970's "eight to ten percent of the population" filed an estate tax return. Mielock indicated that now "all this work for estate administration attorneys to do in the past has decreased significantly."

"For many years," said Nancy Little, "we had a Michigan Inheritance Tax that required a tax return on any estate over $100.00. "The tax was calculated not only on the amount but also on who you left it too. In 1993 that gave way and was tied to the Federal Estate Tax and that was a big part of practice, now gone."

Other changes causing loss of practice are the increase in non-probate assets such as retirement plans and those assets get passed on at the death of the plan holder, transfer on death legislation such as securities and real property making it possible for people to prepare documents themselves, which could "generate work since they don't always do it properly."

The recession has created more probate litigation since family members are disappointed with their inheritance. Little and Mielock agreed that area of probate will increase. The future is in the demographics, Mielock noted. The baby boomer bulge is getting older and "people don't do estate planning until later in life and there will be an increase in estate planning due to this demographic."

Increase mobility and globalization means "clients have adult children who are all over the country which raises issues such as how do you compensate the child who is here and takes on more responsibility."

Another issue are "clients that live here but have property in other states," said Little, creating a need to plan to avoid probate in two or more states.

There are planning opportunities with blended families such as first or second marriage. In those situations, "who do you represent?" said Little since the interests of the two may not be the same.

There is also competition from accountants, brokerage firms and web-sites such as LegalZoom. Both agreed that the trust kits can lead to more work since they are often inaccurate.

Surviving the challenges of the future: Make bold in paper.

Both recommended embracing technology to produce cost effectiveness. Technology "might be the biggest impact," said Mielock. "I think that five years from now, you won't be taking your briefcase to court, you'll be taking your tablet computer. And part of the problem is that it is easier to work 24/7."

The Internet has made legal information readily available to lawyers as well as clients, which is more efficient. Many in the group were working toward a paper less office, scanning paper into their computers and shredding the hard copy. Both speakers agreed that a web presence was necessary for success since prospective clients are not using the phone book.

The speakers recommended developing a sub-specialization within the estate planning area such as:

* Elder Law

* Fiduciary Litigation

* Retirement asset planning

* Asset protection planning

"I think specialization is expanding," said Mielock. He suggested that if there is a need for a specialty such as Medicaid planning, "become that expert in your area."

Little spoke of other areas where careful planning will be needed such as non-traditional families--"grandparents raising grandchildren, unmarried couples (same sex and heterosexual) blended families, single parents." Each has unique problems that will need to be addressed.

Nancy L. Little and Douglas A. Mielock were the speakers for the meeting. Both have chaired the ICBA Probate Section, are on ICLE's Estate Planning Advisory Board and are frequent ICLE speakers and writers.

The next probate section meeting will be held on November 15th at noon at the State Bar of Michigan. George Strander, Ingham County Probate Registrar, will give an update on SCAO forms and rules.

Published: Thu, Oct 27, 2011

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