As the estate planning landscape braces for significant changes in 2025, the 59th Annual Heckerling Institute on Estate Planning, held from January 13th to January 17th in Orlando, Florida, offered an indispensable guide for attorneys, advisors, and business owners. The conference highlighted the critical need for proactive planning considering a rapidly evolving tax and regulatory environment. Key topics included the anticipated sunset of the 2017 Tax Cuts and Jobs Act, the rising popularity of purpose trusts, and advanced business succession strategies.
Below are the pivotal themes and insights poised to shape estate and business planning in the coming year. I will also be hosting a virtual roundtable discussion to explore these topics further with industry experts.
- Preparing for the 2025 Tax Landscape
With the scheduled expiration of key provisions from the 2017 tax reform, high-net-worth individuals and business owners must brace for a potential return to pre-2018 estate and gift tax exemption levels. The Heckerling discussions stressed the importance of proactive strategies, such as:
- Utilizing both exemptions for married couples before the exemption amount is halved.
- Engaging in strategic gifting and valuation discounts while favorable rules are still in effect.
- Leveraging QTIP and bypass trusts for long-term tax efficiency.
Advisors need to act now to help clients maximize available benefits before the opportunity closes.
- Business Succession Planning: Embracing Purpose Trusts
Succession planning remains a complex facet of estate planning, and this year’s conference underscored the growing use of purpose trusts—a flexible tool that enables business owners to preserve a company’s mission and values beyond their lifetime. Inspired by Patagonia’s successful ownership transfer via a purpose trust, more entrepreneurs are considering similar structures. Key takeaways include:
- Purpose trusts, which lack identifiable beneficiaries, are enforced by designated enforcers or protectors.
- They provide an alternative to traditional family succession or outright sale.
- State laws vary, with some jurisdictions offering perpetual trusts.
As stewardship models gain traction, purpose trusts may redefine business succession structures.
- Adapting to the New Regulatory Environment
A significant theme at Heckerling was the anti-regulatory shift in federal tax enforcement. Recent Supreme Court cases have curtailed administrative agency authority, resulting in increased litigation against the IRS and Treasury. Expect heightened scrutiny in:
- Charitable deductions and donor-advised funds.
- Valuation discounts and intra-family transactions.
- Trust structures and compliance with anti-abuse regulations.
Estate planners must stay vigilant as the legal landscape shifts toward more aggressive taxpayer defenses.
- Fiduciary and Trust Administration: Strengthening Planning
Increasing trust disputes and fiduciary litigation highlight the necessity for clear trust terms, well-documented intent, and proactive trustee protections. Heckerling sessions emphasized:
- The use of in terrorem (no-contest) clauses to deter trust disputes.
- Nonjudicial settlement agreements (NJSAs) to modernize outdated trusts.
- The role of trust protectors in preserving the settlor’s intent.
Given the evolving nature of trust law, clients should review existing structures to ensure resilience against legal challenges.
- International Trusts and Jurisdictional Diversification
Rising concerns over U.S. tax policy and global economic instability made jurisdictional diversification a major topic. Key strategies include:
- Using foreign trusts and offshore asset protection structures.
- Planning around FATCA and CRS compliance for cross-border families.
- Evaluating the tax implications of expatriation and non-U.S. residency.
For wealthy individuals with international assets, 2025 presents both challenges and opportunities in optimizing tax exposure and regulatory compliance.
- The Future of Buy-Sell Agreements and Life Insurance Post-Connelly
The Connelly case has reshaped the treatment of life insurance proceeds in business succession planning. This year’s conference examined:
- How buy-sell agreements impact valuation discounts and estate tax calculations.
- The IRS’s position on life insurance proceeds affecting share valuations.
- Best practices for structuring entity-purchase and cross-purchase agreements.
Business owners must reassess their buy-sell arrangements in light of these new legal interpretations.
- Charitable Planning Amidst Evolving Legal Standards
With increased legal challenges to gender- and race-specific charitable giving, estate planners must navigate shifting regulations on donor restrictions and endowments. Heckerling speakers emphasized:
- The scrutiny of donor-advised funds (DAFs) under new IRS regulations.
- Challenges in enforcing donor intent due to state law developments.
- Strategies for ensuring charitable gifts remain compliant with legal standards.
Charitable planning requires a proactive approach as courts and policymakers refine the rules governing philanthropic vehicles.
Join the Conversation: Virtual Roundtable on Heckerling 2025 Insights
Given the profound implications of this year’s Heckerling discussions, I am organizing a virtual roundtable for estate planners, business owners, and advisors to delve deeper into these topics. We will cover:
- Actionable strategies for 2025 tax law changes
- Best practices in business succession and purpose trusts
- New legal challenges in fiduciary and charitable planning
- International tax considerations for high-net-worth individuals
If you are interested in attending, please reach out to m.erskine@erskineco.com for details.
Final Thoughts
The 59th Heckerling Institute reinforced the urgency of proactive estate planning, business succession readiness, and tax optimization ahead of 2025’s legal and regulatory changes. Whether it’s leveraging available exemptions, restructuring trusts, or preparing for IRS scrutiny, the time to act is now. I look forward to continuing this conversation in our virtual roundtable and aiding clients in navigating the road ahead with clarity and confidence.
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