COVID-19 caused a spike in estate planning, and Rochester is just beginning to catch up.
Melissa A. Saunders, president of the Rochester Estate Planning Council and attorney at law for Dunlap & Seeger, said she and other members of the council have seen two surges in estate planning over the course of the pandemic: one from concerned health care professionals last spring, and another from older clients.
“I saw a large number of medical professionals, especially at the front of the pandemic, really concerned and wanting to get their estate planning stuff cleaned up — or started, depending on where they were with it,” she said. “And then a lot of our elderly clients are just making changes — just a new perspective and a new way of thinking about things has encouraged people to make changes or updates to their plans.”
The estate planning council is a cross-section of professionals including attorneys, accountants, estimate advisors, and people involved in charitable giving. As a whole, it’s been “busier, in general, than maybe you would expect,” Saunders said.
While not all Rochester attorneys have seen a surge in interest in estate planning, many have.
In 2020, Ward & Oehler Ltd. saw nearly double the number of clients looking to complete estate plans, said Jason Wagner, attorney at law with Ward & Oehler Ltd.
“One interesting trend is that we usually see higher numbers of people doing their estate plans in the first quarter and then lower numbers in the rest of the year,” he said. “In 2020, we saw the lowest number in the first quarter (about on par with previous years), then increasing numbers in each quarter after that, so it was actually the opposite trend from previous years.”
Several studies in 2020 found that although the majority of Americans still do not have a will, the number is on the rise, largely thanks to concerns about the pandemic.
Wagner’s firm did not track the ages of clients, but he said “our experience has been that we have seen increases in every age group.”
“Estate planning is always a high priority when someone is retiring, and we did see COVID pushed a lot of people into retirement, so the estate plan was a natural outgrowth from that,” he added. “Certainly, there were many people that recognized the need for a sound and up-to-date estate plan due to concerns over COVID.”
There’s a third, wealthy category of clients Saunders is focused on now — those with larger estates, who may be impacted by the Biden administration’s plans for estate tax exemption.
A shakeup in tax law
The pandemic was only one complicating factor for Rochester’s estate-planning industry. In 2017, the Trump administration passed the Tax Cuts and Jobs Act, which raised the estate tax exemption (i.e., the amount that a person can pass on tax-free) to $11.7 million as of 2021. That may stand to change this year. The Biden administration has signaled that it may revert to $5 million after 2021, or even $3.5 million.
Saunders said she’s only seen one similar uptick in estate planning — back in 2010, when the estate tax exemption was set to reverse similarly, until a late-state extension.
“There was no public health crisis then, but a similar attitude, Saunders said — “people scrambling to do their guessing and planning.”
Some of Saunders’ clients have, in the hope that a change won’t be retroactive, begun setting up gifts to families, irrevocable trusts, and charitable industries.
The Rochester Area Foundation has heard from more donors concentrating on estate planning in the past year, president Jennifer Woodford said. There may be even more estate gifts coming in the future — sometimes the foundation is aware of incoming gifts, but not always.