A Review of Estate Planning Techniques for High and Low Rate Environments

Written by Emily A. Plocki, JD, LL.M and Anna Katherine Moody, JD, LL.M

We are in a time when economic factors such as volatile financial markets and fluctuating interest rates combine to impact the effectiveness of a variety of estate planning techniques. From 2009 through 2021, interest rates sank to and remained at historic lows. However, due to various economic pressures, rates are on the rise, and it is important for clients and advisors to consider the estate planning opportunities that are most effective in the changing interest rate environment. Certain planning strategies and structures work best when interest rates are high compared to those that are implemented in low interest rate environments. While the current uncertain environment may—understandably—cause clients to hesitate to engage in a significant gifting regime, clients should review their balance sheets with their attorneys and financial advisors and discuss whether any of the planning structures described below provide an attractive planning opportunity for the client’s particular circumstances. 

From the US Tax Court setting aside Internal Revenue Service (IRS) Notice 2017-10 to clarification of an employer's obligation under the Fair Labor Standards Act to compensate employees for certain preshift duties, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

There are many ways to provide for a married client’s surviving spouse after the client’s death. This type of estate planning is often referred to as marital share funding. Spouses may use various marital share funding options in either will- or trust-based estate plans. Their goals may include estate tax planning, probate avoidance (especially when using a trust-based plan), and incapacity planning. Disclaimers can be used when planning for estate taxes and may be particularly helpful in other situations relevant to married clients.