Our guest today is Michael R. Helbert, Esq. Michael is a managing member and a Trusts and Estates and Business Attorney engaging in both transactional and litigation matters at Arrowood Helbert PLLC. If you are in need of an estate plan, assistance with a probate or trust matter, or with your business, give Michael a call! We’ve dropped his contact info below.
Josh: Michael! Thank you for being willing to contribute to our blog. First off, if you could, let our readers know a little bit of background on you. What got you into the estate planning industry, how long have you been doing it, and what are some of your favorite aspects about what you do? Also, maybe give us one interesting fact about Michael that most people don’t know.
Michael: Thank you, Josh. I was born and raised in Kansas and grew up in the legal industry with my father being a lawyer. I received my undergraduate degree from the University of Kansas in 2005 and my law degree from the University of Missouri-Kansas City in 2008. I’ve been licensed to practice law in Arizona since 2008 and in Missouri since 2009.
I was introduced to estate planning in 2009 when I was working for a local law firm here in Scottsdale and I’ve been practicing in this area ever since. One of my favorite aspects of estate planning is getting to really know my clients in a non-adversarial environment where I’m able to help them achieve their goals and to take the burden of not having a plan in place off their shoulders.
People often only see a lawyer after something bad has happened but, with estate planning, we are working to avoid future issues and to hopefully prevent the bad thing from happening in the first place. Many people dread going to a lawyer and setting up an estate plan, but most feel better and even a sense of relief after their estate plan is setup and I enjoy being a part of that process. I also really enjoy getting to know my clients and their story since so many Arizonans originally hail from different states.
Something people may not know about me is that I have recently rediscovered mountain biking and I enjoy spending my free time finding new trails and getting out for a good ride.
Josh: There are probably a million different directions we could go with this interview, but I thought we’d cover a couple of topics that are on a lot of minds right now. So let’s dive into your thoughts on COVID, the 2020 election, and how these events tie into estate planning. To begin, how has COVID affected your industry and your job specifically?
Michael: COVID has had a varying effect on the legal industry as a whole. Some of the medium to larger firms have had staff reductions and layoffs. Other parts of the industry (bankruptcy, family law, etc.) have seen an increase because of the stresses directly or indirectly related to COVID. Working remotely has impacted the industry as well but the long-term ramifications of working remotely have yet to be fully realized and can vary on the size of the law firm and the type of law being practiced. We pride ourselves on being flexible to meet our clients’ needs while also taking the necessary health precautions to keep our clients and staff safe while at our office.
Josh: Sadly, we’ve seen over 200,000 deaths in the US alone (at time of publication), with many more predicted. Has COVID affected the number of estate plans you have put together as people might now -- more than ever -- be thinking about their own mortality and the impact it might have on their loved ones?
Michael: COVID has created challenges but also opportunities for estate planners and most importantly, our clients. Many people, understandingly, did not want to leave their homes or risk contracting the virus by visiting a lawyer at the lawyer’s office. However, we have seen a recent increase in our estate planning practice with people growing more comfortable leaving their homes for signings and with the potential tax changes coming as a result of the election.
We continue to meet with our clients face to face for signings, but the ability to use Zoom, Microsoft Teams and WebEx up until the point of signing has really lessened the burden for many people who do not feel comfortable coming to the office. This has been a resource for all of our clients and not just those looking for an estate plan.
Josh: What are some steps someone might take right now if they have never set up an estate plan?
Michael: First and foremost, contact a qualified estate planning attorney. We offer free consultations for estate plans and on most business matters and our estate plans are generally performed on a fixed fee so there aren’t any surprises with costs or fees. Many of these initial meetings can be done over the phone or even more conveniently with Zoom, Microsoft Teams, or Webex. The most important step with your estate plan is often the first step of contacting a qualified estate planning attorney so you can get the ball rolling. Creating your estate plan is a process and working with a qualified estate planning attorney will help you to timely create the estate plan that works for you.
Josh: Going slightly off topic for a minute; I personally fall within the millennial age demographic, and I would imagine you work with mostly older clients. But we’ve been in the process of putting together a will. We have two young kids at home, and it is really difficult for us to think about things like, “who would take care of our girls if we both died suddenly?” What advice do you have for someone in our shoes facing difficult decisions in the estate planning process?
Michael: I applaud you for putting together your Will. Contrary to popular belief, estate planning is not just for older clients or those with large amounts of money. I’ll also go back to my answer from the previous question - contact a qualified estate planning attorney.
Most people do an estate plan with a trust to avoid probate and it is incredibly important for a young family with minor children to have a plan in place to ensure that their children are properly taken care of both personally and financially.
I try to lighten the mood with my clients and I often joke that doing your estate plan is the legal equivalent of going to the dentist (no offense to dentists especially my dentist) – it’s something you know you need to do, but isn’t something you want to do.
Putting yourself in your loved one’s shoes can help provide some perspective and make you realize the importance of having a plan in place. An estate plan is not only intended to make sure your wishes are carried out, but to relieve the burden of uncertainty from your loved ones during the difficult time that occurs after someone passes.
The people who care for you will be going through a difficult time after you pass and making your wishes clear and in writing is a way to make that just a little bit easier for them. People may not always agree with your wishes, but it is generally easier to move forward if your wishes are clear and in writing. Putting your wishes in writing also generally reduces the risk of disputes over money and the guardianship of minor children.
Josh: Moving on to the recent election. What is your prediction for how things might change in regard to estate planning in the future with Biden / Harris in office?
Michael: I don’t have a crystal ball and this response is intended to be apolitical while also answering your question. The main areas where we see potential changes in estate planning with a Biden/Harris victory is threefold: (1) a decrease in the estate and gift tax exemption; (2) an increase in income taxes and potential charitable planning and giving as a result; and (3) a potential increase in the estate tax.
With all of the uncertainty right now, there is a real possibility that the combined estate and gift tax exemption (currently $11.58 million per person in 2020) will be significantly decreased with Biden/Harris in office (it is already scheduled to decrease by ½ in 2026). The timing of such a decrease also remains up for debate, but many think that it will happen effective in 2021.
The COVID stimulus funds will need to be paid for and lowering the estate and gift tax exemption is generally an easier tax increase pill for the American public to swallow. It won’t be a surprise if income taxes rise to help pay for the COVID stimulus funds. This makes it is a real possibility that the combined estate and gift tax exemption will decrease and that income taxes will increase due to the large amount of federal spending as a result of COVID.
The question is probably one that is more on timing on the tax law changes rather than if they will happen. The possibility of an increase of the current 40% estate tax also exists. This creates current gifting and estate tax freeze strategies that are highly relevant right now. Estate and gift tax planning makes sense for a lot of people who were already considering gifting strategies prior to the current uncertainty and before the sunsetting of the large estate and gift tax exemption in 2026.
If there is an increase in income taxes, then that could lead to more people including charitable planning as part of their estate plans to reduce their income tax liability.
We are currently working on different plans with clients that include taking into account some or all of these scenarios through different trusts such as Intentionally Defective Grantor Trusts (“IDGTs”), Spousal Lifetime Access Trusts (“SLATs”), Charitable Remainder Trusts (“CRTs”) and Charitable Lead Trusts (“CLTs”).
Josh: As financial planners, we are always thinking in terms of managing financial risks. What risks (financial or other) do you foresee as it relates to the election results and what ways might we hedge against them?
Michael: I’ll leave the financial risk assessment to the financial planners. You should have a quality team in place to help you plan for the uncertainty that life generally throws at all of us on a regular basis. That team should include a qualified financial planner, a CPA and an attorney. It’s possible, or even likely depending on your situation, that you won’t need to use your team on a regular basis but having the team in place and knowledgeable about you and your situation can be invaluable. Each person is unique and each situation is different, so it is important that you are getting advice tailored to you and your specific needs. It is equally important that you feel comfortable working with each member of your team as you will be sharing important and confidential information with them.
COVID has reminded us that life is uncertain and that includes this election and past elections. Regardless, an estate plan is important so that you can try to minimize the uncertainty in what happens after you pass and alleviate the burden on your loved ones. Additionally, estate plans normally include healthcare powers of attorney and living wills which are also incredibly important given the uncertainty of life in general.
Josh: That's a great point. Thanks for that reminder. Michael, as we begin to wrap up, anything else you would like to share with our audience?
Michael: I’d really like to just go back to making sure you have a quality team of professionals in your corner. Life is uncertain which has only been highlighted in 2020. Planning for the unknown and putting a quality team of professionals in place to help guide you not only provides you with the legal and financial framework to help you succeed but can also help alleviate the stress that comes with uncertainty and the unknown. It is also important that you are comfortable with the members of your team – you need to make sure they are a good fit for you so find the right professionals for you. We’d be happy to part of that team if we are a good fit for you.
I’ll leave your audience with ten reasons why they should have an estate plan:
- To avoid probate by distributing assets in a timely fashion pursuant to a revocable living trust centered estate plan and with a minimum amount of legal hassle;
- Provide support and financial stability for your surviving spouse, children, and grandchildren;
- Preserve your wealth for later generations;
- Designate guardians for minor children to avoid custody issues;
- Make sure your wishes are carried out when you can no longer manage your affairs in the event of incapacity or disability;
- To provide advance health care plans for emergencies if the situation arises;
- Support a favorite charity or cause with a gift of money, securities, or other property;
- Minimize taxes and expenses that can go along with transferring assets;
- Avoid problems for your loved ones by ensuring that the beneficiaries named on your life insurance and retirement plans are still the people you want to benefit; and
- Set and meet expectations of your survivors so there is no confusion or misunderstanding.
Josh: Michael, thank you so much. You’ve been very generous with your time answering our questions, and our readers really appreciate your valuable input.
If you have further questions and would like to reach out to Michael, his contact information is:
Michael R. Helbert, Esq.
Arrowood Helbert PLLC
14256 N. Northsight Blvd., Suite 110
Scottsdale, Arizona 85260
P: (480) 719-7524 x 202
*The information provided by Michael Helbert in this blogpost is solely for informational purposes and does not constitute legal advice. This blogpost is not intended to create an attorney/client relationship and the information provided should not be relied upon as legal advice. The determination of the need for legal services and the choice of a lawyer are important decisions and should not be made solely upon advertisements or self-proclaimed expertise. No representation is made that the quality of the legal services to be performed is greater than that of other lawyers. This blogpost is not intended to seek employment in any state or jurisdiction where lawyers in Arrowood Helbert PLLC are not licensed or admitted to practice law or in any state or jurisdiction where this blogpost would be in violation of any requirements concerning attorney advertisements and solicitations.