Legacy Planning, Once Removed

When donors make gifts — during their lives or upon death — they typically give up control. Trusts have long been a tool for donors to maintain influence over how assets are managed and distributed by choosing trustees and drafting instructions. Traditionally, the settlor — the person creating the trust — cannot serve as trustee, especially if they want the trust to achieve certain tax or asset protection goals.

But an AI program could be trained on the settlor’s wishes to make decisions the way the settlor would. This program can be incorporated into the trust structure as a settlor-trained AI (STAI) trustee, in a formal or informal way, so that a digital version of the settlor provides guidance long after the settlor can.

This episode explores the concept of the STAI trustee and summarizes key concepts from a recent article Steve authored with colleague David Hirsch. The STAI trustee could be a powerful tool to help settlors structure trusts to carry out their wishes in the future, but there are pitfalls to navigate in exploring this concept.

Under current law, individuals have a high estate tax exemption. But if one spouse dies without using all of his or her remaining exemption, steps can be taken to allow the surviving spouse to pick up and use a deceased spouse’s exemption — the Deceased Spouse’s Unused Exclusion (DSUE) — through a process called portability. This can result in significant tax savings upon the surviving spouse’s death.

Yet the election for portability is not automatic. There are steps that must be taken and other nuances to consider in electing portability. The recent case of Rowland v. Commissioner illustrates potential pitfalls and the importance of following the applicable requirements to take advantage of this important election.

Rowland also serves as a reminder to review the estate plan to ensure it properly takes advantage of and recognizes the limits of portability and that processes are in place so that upon one spouse’s death, due consideration is given to whether to elect portability.

As part of their estate planning, many clients want to specifically provide sums for the education of their descendants or other beneficiaries. It is easy to understand why — many clients see education as a way to facilitate their beneficiaries’ personal and professional development and help them lead productive and fulfilling lives. This episode explores the concept of an Educational Dynasty Trust and examines issues clients should consider for the structure, funding and administration of such a trust over time.

The passage of the One Big Beautiful Bill Act provides some clarity around the laws related to estate tax, gift tax and generation-skipping (GST) tax — at least for now. This episode summarizes the key provisions of that act. Perhaps most importantly, the passage of this act provides an opportunity for clients to revisit their estate plan and current tax strategies without the immediate time pressure of a potential “sunset.” This episode also provides some specific tips on how clients can make the most of this opportunity to review their estate plans in this period of clarity and predictability. 

Tax laws seem to regularly change, and clients face estate and tax planning challenges in the face of that uncertainty. For the last few years, estate and tax planners had one issue in mind: the scheduled “sunset” of the high estate, gift and generation-skipping transfer tax exemptions at the end of 2025. But the Trump administration’s One Big Beautiful Bill Act proposes to keep the exemptions high. It remains to be seen whether this bill will pass, and whether its terms will be “permanent” or subject to another “sunset” that will leave taxpayers uncertain years from now. This episode explores the terms of the bill and offers suggestions on how to plan in the face of this proposed legislation — and other uncertainties in tax law.

The One Big Beautiful Bill Act being considered by Congress serves as a reminder of the uncertainty of tax law. Although tax law should not be the only consideration in an estate and legacy plan, clients should adopt such plans with tax issues in mind — which is difficult because tax laws often change. In a recent episode, “Countdown to Sunset 2025: Planning in the Face of Scheduled Changes in the Law,” Steve reviewed the possibility that estate and gift tax exclusions could “sunset” at the end of 2025 and how that could impact a client’s planning.

In addition to the One Big Beautiful Bill Act, there is another proposed bill that would repeal the entire estate tax. Although repeal seems unlikely, this bill shows what it could look like. Estate tax repeal is a possibility clients should consider, if for no other reason than to illuminate the role of tax considerations in decisions about estate and legacy planning.

In this episode, Steve discusses the state of the potential “sunset” and reviews the proposed bill that would repeal the estate tax. This episode explores the proposals and how clients can approach their planning in light of uncertainty.

The last two episodes discussed the challenges everyone faces with being purposeful and productive throughout the day. Part 3 of this series continues the exploration of this topic through the metaphor of golf and other golf-like activities. This episode examines the metaphor of finalizing and polishing projects with care and using self-reflection to build positive habits for the future.

As discussed in the last episode, a common feature of daily life seems to be that everyone in the family is busy, and everyone struggles with being productive. Part 2 of this series explores more lessons from sports — particularly golf — for identifying the most important things to work on and staying productive throughout the day.

One common feature of daily life in every generation is that everyone is busy and struggles with being productive. This episode explores lessons from sports — in particular, golf — as a metaphor for helping us start our day in a way that makes it productive and meaningful.

There are numerous ways to give or leave assets to beneficiaries, and each structure should be carefully tailored to be consistent with the client’s goals. Three common goals for estate planning are to protect, manage and preserve assets. This episode explores ways to structure asset protection, asset management and asset preservation trusts to balance access, control and flexibility.