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For many clients, estate planning sits in the category of "important, but not urgent."
Once documents are signed, the plan can easily become something clients intend to revisit but rarely do.
Meanwhile, families change, wealth grows, relationships evolve, and tax laws shift. A thoughtful, well-crafted estate plan from five or ten years ago may no longer reflect a client’s current circumstances, priorities, or intentions.
Advisors can help clients identify “dusty trusts”: estate planning structures that may still be legally valid but have not kept pace with the client’s life, goals, or today’s planning environment.
Start with Purpose
Estate planning discussions can feel uncomfortable. They touch on mortality, family dynamics, and personal values. Yet these conversations are often among the most meaningful an advisor can have.
Rather than focusing immediately on documents and tax strategies, start with purpose.
Ask questions that help uncover what clients truly want their wealth to accomplish:
- What does a successful legacy look like to you?
- How do you want future generations to benefit from your wealth?
- Are there family values, charitable causes, or life lessons you hope to pass on alongside financial assets?
- Have your family circumstances changed since your estate plan was created?
- Are there individuals you would add, remove, or treat differently if you were creating your plan today?
Clients may discover their goals have evolved significantly since their trust documents were drafted.
Identifying a Dusty Trust
Estate plans should be periodically reviewed, particularly after significant life events or shifting priorities, such as:
- Marriage, divorce, or remarriage
- Births, deaths, or new grandchildren
- Sale of a business
- Changes in real estate holdings
- Significant adjustments in net worth
- Relocation to another state
- Changes in health circumstances
- New charitable objectives
- Substantial changes to federal or state tax laws
A trust created years ago may still be legally valid, yet no longer fully aligned with the client's objectives.
For example, a trust drafted when children were young may not reflect the realities of mature adult beneficiaries. Similarly, distribution provisions designed around a client's former financial situation may no longer make sense after years of wealth accumulation.
The goal isn't necessarily to replace a trust. Often, it's to determine whether the plan still reflects the client's intentions.
Questions Advisors Should Be Asking
One of the most valuable services advisors can provide is helping clients regularly revisit foundational assumptions.
Consider incorporating questions such as:
Family
- Who depends on you financially today?
- Have family relationships changed since your plan was created?
- Are there beneficiaries who now have different financial needs?
- Have any heirs demonstrated financial responsibility concerns that should be considered?
Wealth Transfer
- Do you intend to distribute assets equally or equitably?
- Are there assets with sentimental value that require specific planning?
- Have you discussed your intentions with family members?
Business Interests
- What is the succession plan for your business?
- Who will control or manage business assets if something happens to you?
- Have ownership structures and beneficiary designations been updated?
Philanthropy
- Are there charitable organizations you would like to support?
- Have your charitable goals changed?
- Would structured charitable giving strategies enhance your overall legacy plan?
Decision-Makers
- Are your trustees, executors, and powers of attorney still the right people?
- Would those individuals be willing and able to serve if needed today?
The Tax Considerations Clients May Overlook
Estate planning is ultimately about people, purpose, and legacy. Taxes are also an important part of the planning process, and advisors can help clients consider how federal and state estate taxes, income taxes, capital gains, and the taxation of trusts may affect the transfer of wealth. The objective is not to let tax considerations drive the entire plan, but to ensure they are thoughtfully integrated with the client’s broader goals.
Even with historically high federal estate tax exemptions, there are several tax-related considerations that warrant a closer look.
State Estate and Inheritance Taxes
Clients who have relocated, own property in multiple states, or plan to retire elsewhere may be surprised to learn that some states impose estate or inheritance taxes with exemption amounts that are significantly lower than the federal threshold.
A move across state lines can create new planning opportunities or unintended consequences, making periodic reviews especially important.
Capital Gains and Cost Basis
Clients often focus on estate taxes while overlooking the potential impact of capital gains taxes on heirs.
Understanding how assets may receive a step-up in cost basis at death can be an important factor when determining which assets to gift during life versus transfer through an estate.
Retirement Accounts and Beneficiary Designations
Retirement accounts may require special attention because the beneficiary designation on file with the plan or account custodian generally determines who receives the assets. The tax treatment and distribution requirements for inherited retirement assets can also vary based on factors such as the type of account and the beneficiary’s relationship to the account owner.
Advisors can help clients review whether beneficiary designations remain current and coordinate with their estate planning attorney and tax professional to evaluate how retirement assets fit within the broader estate and legacy plan.
Trust Income Taxation
Some older trust structures may create unintended income tax consequences or administrative complexities that warrant review.
As tax rules evolve, strategies that were attractive years ago may be less efficient today.
Charitable Planning Opportunities
Charitable remainder trusts, donor-advised funds, and other philanthropic structures may help clients align charitable intent with tax-efficient giving objectives.
The key is not for advisors to provide legal or tax advice outside their expertise, but to help coordinate the planning process. By working in partnership with a client’s estate planning attorney and tax professional, advisors can help ensure that the legal structure, tax strategy, investment plan, beneficiary designations, and broader legacy objectives remain aligned.
Bottom Line: Legacy planning is an ongoing process, and the most effective estate plans evolve as families evolve. Advisors can add meaningful value by helping clients revisit their estate and legacy plans regularly—and by coordinating with their estate planning attorney and tax professional to ensure that the legal structure, tax strategy, investment plan, beneficiary designations, and broader legacy objectives continue to work together as intended.
The Firm does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. It was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. Each Jurisdiction tax laws are complex and constantly changing. You should always consult your own legal or tax professional for information concerning your individual situation.
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