By Steven J. Oshins, Esq., AEP (Distinguished)

History repeats itself. First, there was the fiscal cliff in 2012. Then there was the “threat” of a Biden presidency and an upcoming tax act in 2020. Now we are living through the “threat” of an upcoming tax act as we near the end of 2021.

Each of these three years has something in common — a supply/demand ratio that made it impossible for many potential clients to be able to find a capable estate planning attorney to take on their work and be able to complete it by year-end.

YEAR 2012

In 2012, there was the threat of a fiscal cliff at the end of the year whereby the $5 million estate and gift tax exemption would revert back to $1 million.

Therefore, countless numbers of multi-millionaires were knocking at the door, especially during the second half of the year, asking estate planning attorneys to hurry their $5 million gift trusts. At some point, attorneys had to start saying no to potential clients given capacity issues because there were too many people wanting to start the process later in the year.

YEAR 2020

In 2020, it seemed that Donald Trump would win the presidency, but then Joe Biden pulled the upset and became president.  Even before that happened, many wealthy people had already hedged and started the gifting process well before the elections knowing that it may be too late if they waited until after the November elections to try to find an attorney with the necessary skillset who was still taking year-end time-sensitive clients.

Many of the wealthy remembered what happened in 2012 and that they shouldn’t wait until September or October to start the process.  The craziness seemed to start much earlier in 2020 than in 2012 because of the intelligence gained in 2012 when many of them weren’t able to find help later in the year.  Advisors were likely pushing their clients earlier in the year after having lived through 2012.

YEAR 2021: DID ATTORNEYS LEARN FROM 2012 AND 2020?

We’ve all known for a long time that there will likely be a Democratic tax act coming at some point. None of us know for a fact whether the estate and gift tax exemption will be dropped, but it is certainly a viable possibility.

I cannot speak for other attorneys, but I started telling prospective clients and referral sources early in the year that if they wait until October they may not be able to get it done. I encouraged people to make their gifts before the middle of the year in order to make sure they didn’t miss the opportunity.

This mostly worked. However, to nobody’s surprise, the largest flood of potential new clients came in September and October which is exactly what happened in 2020. But overall, we learned from 2012 and 2020 and were able to handle the extra flow of work better than in either of those prior years. This made 2021 a better year than 2012 and 2020.

I hope others are handling the 2021 trust tsunami well and were able to learn from 2012 and 2020 as I did. Good luck to all who are frantically drafting and finishing trusts as we get closer to year-end. Yikes, I need to cut this article short and get a few more trusts drafted!

RELATED EDUCATION

If you found this article interesting, you might also be interested in these other educational programs and products by Steve Oshins:

• The Spousal Lifetime Access Trust: A Gifting and Creditor Protection Technique
• Estate Planning Techniques in a Time of Low Interest Rates
• The Installment Sale to an Intentionally Defective Grantor Trust
• The Grantor Retained Annuity Trust: Significant Estate Tax Savings with Nearly Zero Gift Tax Risk
• Steve’s FREE State Rankings Charts

ABOUT THE AUTHOR

Steven J. Oshins, Esq., AEP (Distinguished)  is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. He was inducted into the NAEPC Estate Planning Hall of Fame® in 2011.  He has been named one of the 24 “Elite Estate Planning Attorneys” and the “Top Estate Planning Attorney of 2018” by The Wealth Advisor and one of the Top 100 Attorneys in Worth. He is listed in The Best Lawyers in America® which also named him Las Vegas Trusts and Estates/Tax Law Lawyer of the Year in 2012, 2015, 2016, 2018, 2020 and 2022.  He can be reached at 702-341-6000, ext. 2, at soshins@oshins.com or at his firm’s website, www.oshins.com.