A fellow of the American College of Trust and Estate Counsel, Jennifer Jordan McCall '78 was named in Chambers USA Guide (2007) as a leading attorney in the wealth management field. McCall has been named a “Super Lawyer” by The New York Times (for New York) and by Law and Politics and San Francisco magazines (for northern California). She has lectured extensively and conducts seminars on estate and tax planning.

McCall graduated from Princeton cum laude with a BA in English. She earned her JD from the University of Virginia School of Law in 1982 and an LLM from New York University School of Law in 1988.

When you talk with your clients about estate planning, what does that involve?

Estate planning covers a spectrum of goals, from taking advantage of available tax credits and deductions in order to avoid expensive taxes, to ensuring wealth is passed along to loved ones in ways that reflect the donor’s values while leaving a meaningful legacy.

Can you highlight some of the most popular estate planning techniques?

There are many benefits of using a trust. It provides structure, flexibility, and protection. Basically, a trust allows an individual to decide who will inherit his or her assets and to control the manner in which those assets are passed on.

A marital trust, for example, uses the marital deduction to defer estate tax until the death of the surviving spouse. This trust can control where the trust assets will go when the surviving spouse dies (such as to the children of the testator— or to trusts for their benefit).

In another scenario, a trust can protect against a surviving spouse’s right to challenge a will where assets are intended to go to children from a previous marriage.

Typically, an individual will set up a testamentary trust (under his or her will) so that he or she can take advantage of passing a certain amount (currently a maximum of $2 million, scheduled to rise to
$3.5 million in 2009) tax-free to any person desired.

There are other techniques for transferring property with reduced transfer taxes such as a Qualified Personal Residence Trust, or the more complex, yet popular, techniques such as the Grantor Retained Annuity Trust and the sale of stock to an Intentionally Defective Grantor Trust.

What important areas of estate planning can sometimes be overlooked?

By their very nature, many potential threats to an estate are unforeseen—divorce, accidents, business downturns. That’s why it’s important to consider not only tax-efficient wealth transfer, but how to segregate assets through a trust. Having a trustee is also helpful: he or she can neutralize many personal financial requests, thereby protecting the beneficiary from extraordinary pressures or demands from family, friends, or business associates.

And then of course there is charitable planning, which I consider to be the final important cornerstone of an estate plan. I’m seeing so many individuals who are more focused on this, who already get great satisfaction from making gifts, and are fulfilled and motivated from their grant making activities. They’re thinking hard about the type of gifts they can make now and through their will.

What questions typically arise in charitable planning?

It’s hard to give money away well—to family or to charity. Some parents are concerned that if children are assured of even a relatively modest amount of assets coming to them, no matter how they conduct their lives, they may be denied the opportunity to develop the self-esteem that comes from having “earned” the money they receive. To this end, those parents are also looking at charitable planning alternatives.

Charitable remainder trusts can provide a modest income to a child during his or her life, and a gift to charity later. Lead trusts are particularly viable when parents want to involve their children in planning their gifts. The children can take part in deciding which nonprofits receive the money and which areas to support. At the same time, the underlying fund is being preserved—and may even grow in value—for the children’s use later. With a charitable foundation, many family members can enjoy roles in grant making as members of the board or, for younger children, as members of a “junior” board. In either case, the involvement can be very fulfilling.