"Estate Planning Awareness Week" was declared by the National Association of Estate Planners and Councils (NAEPC) for October 19-25. NAEPC and other professional organizations, including the American Institute of CPAs (AICPA), conducted educational programs for their members as well as the public, media campaigns, and more.

Why am I telling you this now? Planners should capitalize on the buzz by reaching out to clients. Some prospective clients may remain too traumatized by economic and other worries to hear the messages you've been sending them. Perhaps the blitz by NAEPC and AICPA may "prime the pump" so that they'll hear your calls for planning reviews.

A recent AICPA webinar reviewed why 2009 is such an important year for financial and estate planning. The ideas below, gleaned from that webinar, are not only good hooks to encourage your clients to focus on planning now, but may resonate with your clients if they've been exposed to any of the media coverage or educational seminars that were part of the week.

Get Clients to Focus

"A great approach to win a client's attention is to let them know some of the horror stories of people who have not maintained their planning," suggests Sidney Kess, a nationally renowned tax expert and author of more than 100 books on tax, financial and estate planning. One such story has to do with a client who signed a will in 2001 leaving the maximum amount, then $675,000 to his children from a prior marriage and the balance of his $6M estate to his new wife. With the economic decline his estate dropped to $4M.

With the increase in the exclusion in 2009-the year he died without revising his will-the bequest to his children equaled the exclusion amount or $3.5M. His second wife of more than a decade received a mere $500,000. Kess encouraged practitioners to share horror stories they've seen with clients to motivate them to action.

Who Pays Estate Tax

Let's take a line from Dr. Phil and "get real" about the estate tax. "In 2006 when the federal estate tax exemption was $2 million, there were only 22,624 estates that owed an estate tax. The increased exemption amount has removed 90-plus% of the population from paying estate taxes, and reduced federal estate tax revenue by one-half. Estimates are that there might be only about 7,000 estate tax returns showing an estate tax due with the $3.5 million exclusion," observes Daniel L. Daniels, partner in the trusts and estates department of the Stamford, Conn. office of Wiggin and Dana. So what might this mean?

* Many folks still assume they will bear a big tax burden. They buy life insurance and plan their wills and/or trusts on this basis. Most won't. Their planning should be addressed to reflect this. Perhaps life insurance coverage can be reduced.

* A biggie with Roth IRA conversion analysis is that the income tax paid on the conversion will not be taxed as an asset in the converter's estate. Well, if the persons evaluating the pros and cons of conversion won't realistically pay an estate tax, the calculus changes.

* Charitable bequests may afford no estate tax benefit if there is no tax due. This makes it more advisable to make the charitable gifts before death or request heirs to do so. That will preserve the income tax benefit when there is no estate tax benefit. This timing change can affect financial planning projections and investment policies.

Plan Defensively

De-Fence! That's what the placards scream at the football stadium when the opposing team has the ball. That's the right paradigm for estate planning now. While Congressional timing and action is uncertain, consider defensive but flexible steps:

* Fund 529 plans with the client as account owner. If there is no tax the client can reclaim the funds.

* Use self settled dynasty trusts so that the client can remove assets from the estate but remain a beneficiary.

* Use grantor trusts with a toggle switch. If the estate tax were actually repealed the client's requirement as grantor to pay income tax can be toggled off. If not it can remain on to reduce his or her estate.

Revisit Dispositive Schemes

Too few clients have reviewed what the dispositive provisions of their wills and/or trusts really mean in the wake of so much recent economic volatility. "Often clients make gifts that may have been funded with specifically stated stocks or mutual fund shares [for example, 100 shares of Citibank or GM stock]. What was once an estate plan with equal gifts to children may now be lopsided because the value of the assets has changed," cautions Jacqueline Patterson, of Haney, Buchanan & Patterson in Los Angeles. Example: The Smiths' plan leaves their house (worth $1.0M) to Sally and life insurance proceeds of $1.0 million to Susie. But the house may have appreciated or depreciated. In larger estates, there could also be an unequal allocation of taxes based on the specific bequest. This would be easily discovered in a review of the plan and simple adjustments could be made.