Article: Is Estate Planning Ethical In An Increasingly Inequitable World

Harry S. Margolis (Margolis Bloom & D’Agostino) recently published, Is Estate Planning Ethical In An Increasing Inequitable World?, ACTEC Law Journal, VOLUME 49, Number 1, Fall 2023 (pub 1/24). Provided below is an Abstract:

It’s hardly news that over the last half century, in terms of income and wealth, our nation has become increasingly unequal. The question I will explore in this article is whether in that context what we do as estate planners, eseentially assisting our clients in passing on intergenerational wealth by minimizing taxes and easing the process, is ethical.

At first blush, there’s nothing wrong with this. We are simply helping our clients fulfill their goals in a lawful manner.

But does it matter that we are doing this in a nation that is becoming increasingly unequal, where it’s always been easier for some sectors of the population to build wealth than others, and where our services are only available to those who can pay our fees? Does the answer change depending on who our clients are, whether they are part of the top one percent financially, the next nine percent who are doing well in our economy, or everyone else? Does it matter how much we push the envelope on tax and asset protection planning? Or whether we lobby for or against laws that help our clients preserve their welath?

Of course, for many there’s nothing wrong with the great disparities in wealth or their continuation from generation to generation. Others who believe that growing inequality and concentration of welath is aproblem feel that it’s a public policy or philosophpical question, not one of ethics for individual attorneys. 

Yet, the greater concentration of wealth in the United States has been accompanied by changes in laws that further that concentration an its preservation from generation to generation, including the increase in the threshold for estate and generation skipping taxes, the development of domestic asset protection trusts, and the elimination of the rule against perpetuities. At the same time, new scholarship has demonstrated that the costs of probate, intestacy, partition and tax takings make it more difficult for families with fewer resources to accumulate wealth. 

This article will consider the question of whether estate planning is ethical with respect to different types of estate planning, various clienteles, and government policies that act to discourage many from engaging in estate planning and suggest steps individual attorneys and our professional organizations can take to make estate planning services more available to those who are not served today.