Importance of Certainty and Permanence for Long-Term Planning

Successfully planning for your financial future and that of your family and business over a lifetime requires certainty. Effective planning also needs predictability that shouldn’t be undercut by recurring changes in the tax code.

In the area of estate and business succession planning, uncertainty with respect to tax rules has been shown to reduce incentives for thoughtful decision making and led to unsuccessful transfers to succeeding generations and problems for the family members, employees, and businesses affected. Frequent changes to the tax regime discourage or disrupt the effective planning currently done to help ensure that businesses, farms, and other assets are passed on and remain viable from one generation to the next. On the other hand, a reasonable and durable estate tax regime provides the predictability to use effective planning tools that protect the family, the business, and the employees by providing liquidity to manage the transition that must occur when a founder or owner passes, as well as cover applicable taxes.