“We think anybody who is not a global investor is short-changing their clients,” said Mark Eveans bluntly.

Estate Planning

As Brian Leitner pointed out, beginning in January 2014, individuals pay no federal estate tax on transfer of assets at death up to $5.34 million, or up to $10.68 million at the death of the second spouse if the first spouse’s credit was not used.

“A few years ago, the exemption was at $675,000,” said Leitner. “Today it’s north of $5 million.” But he added an important caveat: Washington’s need for cash could make those exemptions a target. “There are wars to pay for. There are deficits to be paid. This is a great revenue source.” Leitner wondered whether this level of exemption was permanent and what effect this would have on estate planning.

As Tommy Taylor observed, even if people trust Congress, they should remember that congressional majorities can and do change. The Obama administration wants the exemption level to go back to $3.5 million; the Republicans want it gone. “I think if Republicans get control of congress and the White House, I think Congress may go after ... some of the more sophisticated strategies we use,” said Taylor, “but the estate tax, I think, is only going to get more favorable to the taxpayer.”

“I don’t think they’re going to change the level anytime soon,” said Brett Broyles, but, as he pointed out, it is indexed for inflation. If a well-diversified portfolio averages 6 percent a year, and inflation runs at, say, 2 percent, clients need to project 10 to 15 years down the road to see whether their assets have outstripped the exemptions. “It’s almost like a stealth tax increase,” Broyles observed.

Lynn Mayabb agreed. She felt confident that the level of credit would not go below the $5 million-plus mark in the foreseeable future. This, she believes, will give a little breathing room for “the middle affluent.” She worried, however, that, given the generous exemption, some people might become a little complacent and ignore the planning process.

As Ken Eaton noted, one of the major concerns clients have had for a long time is how to get their business to the next generation and make sure it stays intact. They really have much better opportunity to do that with a family business or family farm because they’re not paying all the estate taxes they would have, he said. That much said, there is still much planning that needs to be done.

Bob Rippy had a similar concern. He worried that individuals might neglect other aspects of their estate situation because they are not as anxious about the estate tax.

Estate tax or not, said John Jespersen, it is still essential for clients to find the right trusted professional to work with going forward. That is a professional willing to assume fiduciary responsibility for the clients and not just nail them for the next fee.

Tommy Taylor has seen movement in recent several years away from traditional estate planning towards the creation of lifelong trusts for one’s children. The motives include making it tougher for the creditors to get at the estate, and it also protects children against a marriage that goes south.

The Next Generation

Brian Leitner raised the question as to how financial advisers were accommodating that next generation of investors, especially the children of their current clients.

Mike Searcy, founder and president of Searcy Financial Services, started reviewing such trends about three years ago and concluded that younger people were not keen on signing up with “their father’s financial planner”—literally or metaphorically.