Spring, TX estate planning & probate attorney Christine Butts talks about the trends she sees in estate planning. When she discusses trends in estate planning, she notes that the focus has changed considerably over the past twenty years. Two decades ago, one of the main topics she addressed with clients was how to prepare for the estate tax when one spouse or both spouses passed away. These conversations often took a significant portion of the meeting because they were complex, covering not only estate taxes but also income taxes related to retirement accounts. At that time, the estate tax exemption was less than a million dollars, which meant that the tax affected moderately wealthy and even middle-class clients—almost everyone she met with had to consider it.

Today, the landscape is very different. As of 2021, the estate tax exemption is $11.7 million, though projections suggest it may decrease to $5 million, adjusted for inflation, with some speculation that it could fall even lower. Even at $5 million, the estate tax impacts far fewer families than it once did. She observes that this shift allows many clients to focus more on structuring an estate plan that reflects their personal wishes rather than worrying about complex tax planning.

She estimates that roughly half of her clients now fall into this category: families who are able to prioritize their goals, with only minor consideration given to income taxes related to retirement accounts.

The other half, however, remain highly focused on the estate tax. With the exemption at an all-time high of $11.7 million, many clients want to know how to secure that amount for future transfer to their heirs, even if they do not pass away in 2021. Her role is to guide them in strategically maximizing the benefit of the exemption.

In her experience, estate planning today exists at two ends of the spectrum. On one end, families can focus almost entirely on their personal wishes without significant tax concern. On the other, clients are intensely focused on capturing the full advantage of the current exemption and planning accordingly.