Rising interest rates and potential changes to federal estate taxes are driving a surge in estate planning activity, according to a new survey report from Bank of America.
BofA's 2024 report on trust and estate trends draws on a survey of 513 estate planning professionals that was fielded in July.
Among those surveyed, 76 percent said clients are revisiting their estate plans in response to the current interest rate environment, as higher rates are influencing decisions about gifting and trust structures.
“Interest-rate changes are the number one reason clients are revisiting their estate plan,” the report states. With rates at their highest levels in over a decade, survey respondents said many clients are rethinking strategies tied to intrafamily loans, grantor retained annuity trusts (GRATs), and other tools that depend on lower rates to optimize tax efficiency.
Additionally, uncertainty surrounding federal estate taxes is motivating high-net-worth individuals to act sooner. A majority of respondents noted that the scheduled 2026 sunset of provisions from the 2017 Tax Cuts and Jobs Act, which may lower estate tax exemptions, has created urgency among clients. More than 70 percent said concerns about estate tax law changes are pushing clients to update their plans.
In response, 86 percent of estate planning professionals are recommending adjustments, with gifting strategies (53 percent), tax-efficient trust structures (50 percent), and the establishment of irrevocable trusts (40 percent) being the most common solutions. These approaches aim to mitigate the impact of both rising rates and potential tax increases.
The report also identifies gaps in engagement with key age groups. While estate planning activity typically begins when clients hit their fifties, a significant number of first-time planners (22 percent) are in their forties. Advisors are also encouraged to revisit assumptions about older clients, as some in their sixties may lack updated or complete plans.
Family business owners face unique challenges, with only one-third having formalized succession plans despite 54 percent intending to pass their businesses to the next generation. Trusts remain a preferred tool for preserving family control while addressing the differing needs of involved and uninvolved heirs.
While clients tended to play down or turn a blind eye to concerns about incapacity, 45 percent of professionals in the survey said they recommend including an incapacity provision in trust or estate plans. And in a nod to the importance of family dynamics, three-quarters agreed transparent communication and updates are the most effective strategy for minimizing conflicts and ensuring alignment with client goals.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
