Although I probably lacked the maturity to admit it, calculus and physics were two of my favorite subjects in high school. The 70's, when I was in high school, were not a heady time, but rather were a spacey time. Remember Timothy Leary ("turn on, tune in, drop out")? Being the "artist" I perceived myself to be, I thought liking calculus and physics put me among the geeks and nerds who got excited over the density and velocities of snowballs.
Fortunately, I still liked the class and had enough independent thought (independent of Timothy Leary, anyway) to enjoy the classes and do well in the subjects. One of the principles that both of these subjects teach you is that change in constant and, indeed can be measured.
Yes, I'm still taking the ferry to work whenever I can. This is a picture of a cruise ship that came into the Bay this Summer. Summer is a big time for cruising to San Francisco.
So what does this have to do with tax law? Its easy: Change is constant. You can count on the fact that no political party or ideology will permanently occupy Congress or the White House. You can also count on the fact that ideas about what makes appropriate tax policy do not begin and end with a few economists achieving agreement on a balance between fairness and economic efficiency.
The tax trajectory is not as simple as a snowball falling from a building. The variables exceed the limits of algorithms, because the variables themselves are being created and developed by those with different points of view and their constituents. Consider it a snowball being thrown at a fast-moving bird in a blizzard, on a planet whose gravitational force changes from moment to moment: you will have a vague idea that the snowball is heading roughly in the direction of the bird, but you will periodically need to adjust your calculations to have any assurance of getting close.
Similarly, there is a popular expression in the coaching world that airplanes are off course 95% of the time, and being a pilot means you have to regularly adjust the vector to reach the destination. So what does this have to do with estate tax planning? Everything.
By knowing that change is constant, we can establish structures that are designed to be modified. By way of example, creating revocable trusts where possible. If an irrevocable trust is indicated, create a trust protector feature that permits a third party to correct mistakes or modify provisions (on a non-fiduciary basis) to confirm to the ever-changing variables of tax law (and family dynamics,and investment objectives, and so on). Create durable powers of attorney that give loved ones - perhaps acting in concert, but certainly while acting in a fiduciary capacity for the principal - the power to change the timing or structure of a bequest (without changing its overall substance or relative size). Or build in the ability to change the remainder beneficiary of a charitable trust from one charity to another.
I am not happy that Congressional leaders cannot reach a consensus on the right tax policy for the country. At the same time, we are not helpless about our planning. Like flying, we should expect to be off course 95% of the time, but it does not mean we should not get into the cockpit and begin navigating our way in the direction of our destination. But you can count on change. The calculus itself predicts there will be change. Have a good map, a solid navigator and crew, and - as always - pack a parachute.
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