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Trusts & Estates Articles
John Ward’s Perpetuating the Family Business is not about saving taxes, rather it is about saving the family and its business. The book, a self-help guidebook to family business owners, is a synthesis of Ward’s experiences in advising such owners here and abroad. From those experiences Ward draws both insights and lessons to inform family business owners in their pursuit to guarantee the continuity of the business for future generations.
Besides focusing on saving transfer taxes, there are many other areas where estate planners can help and provide real benefit to their clients.
Recently enacted “portability” provisions authorize estate of decedents dying in 2011 or later to elect to transfer their unused $5 million exemption from federal estate tax (increased for inflation) to a surviving spouse.
Succession planning is often the most complicated piece of the estate-planning puzzle. While tax planning has specific statutory rules and court precedents that must be followed to achieve a successful outcome, there are no official rules in succession planning and, often, no perfect solutions.
Imagine your client has an identical twin who acts just like him, likes and dislikes all the same things, shares his precise values and goals and reacts and makes decisions in the exact way your client does…this isn’t just your client’s twin, but your client’s clone…wouldn’t this immortal being be the perfect candidate to serve as trustee of your client’s trusts?
Stephen discusses lapsing 2012 estate planning opportunities for large estates holding businesses and real estate. Stephen also explores some of the lesser-reported implications of the Obama administration’s 2012 proposed budget.
A solution for real estate owners when the debt owed on a property exceeds its basis.
A choice of law provision in a trust agreement, as is the case with any contract, may not be enforceable against persons who are not parties to the agreement. This point was recently reinforced by the U.S. Court of Appeals for the Second Circuit in EM Ltd., et. Al. v. The Republic of Argentina which involved the validity of a self-settled trust created outside of the U.S. by parties who have basically no connection to the U.S. in terms of domicile or residence.
Understanding, communicating and coordinating the roles and responsibilities of the estate-planning team can help prevent important items from falling through the cracks.
Throughout history, many cultures have imposed restrictions on the right of an individual to freely bequeath assets. The historical basis of forced heirship was to require land to pass down to one’s issue—frequently giving priority in distributions to the eldest son. Today, most U.S. jurisdictions permit one to freely disinherit their descendents.
How the new law influences the way we practice now and in the future
On Dec. 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act). The Act significantly impacts the estate planning that advisors will recommend to their clients, as well as the way planners will practice now and in the future.
The current global economic environment demands that legal, accounting and financial professionals be well versed in international tax and estate planning. Sound planning and creative structuring will potentially save clients millions in tax dollars and significant reporting obligations, as well as help clients avoid serious criminal consequences.
In a previous newsletter we informed members how to create a trust that remains a section 678 trust, even after the power to withdraw all property from the trust lapses. By contrast, Avi Kestenbaum believes that it would be difficult if not impossible to create a comprehensive estate plan utilizing a BDIT in most circumstances.
As most high net worth individuals are aware, the federal estate tax will be reinstated as of 1/1/11. One common way in which a person can minimize their estate is the replace appreciating assets with assets that will not appreciate, freezing the value of asset in the individual’s estate.
(Real Estate Taxation, Volume 37/Issue 4, Copyright © 2010 Thomson/RIA)
Tax planning professionals should all consider creating and using a risk assessment checklist at the outset of each estate plan to help us determine which planning techniques, if any, to recommend and then monitor that checklist throughout the planning process.
Estate planning professionals all too often recommend techniques and strategies without doing risk assessment. Partner Avi Z. Kestenbaum suggests using a risk assessment checklist at the outset of estate planning to help determine which planning techniques to recommend and then monitor that checklist throughout the planning process.
Many tax and estate planing professionals are aware of the basic tax rules governing dedications for charitable contributions. They know the general distinctions between the limits on income tax deductions for contributions to private foundations, and for contributions to public charities.
As estate-planning attorneys, we often find ourselves forced to act as family counselors for our clients—despite our lack of formal training for this role. In fact, the psychological aspects of our job are often overlooked and misunderstood, although they’re arguably more important than the complicated tax planning, asset protection advice and legal services we provide.
Stephen M. Breitstone, head of Meltzer Lippe’s Tax Group, discusses the income tax pitfalls that can result from the use of popular estate planning techniques. He also describes a technique that can be used to avoid those pitfalls, known as the preferred partnership freeze.
Howard Esterces, a member of Meltzer Lippe’s Estate and Trusts Group, discusses that those who have already begun receiving required minimum distributions from IRAs and qualified plans may be able to reduce their annual withdrawals—thereby increasing their tax deferral.
Irwin Scherago and Howard Esterces are members of Meltzer Lippe’s Estate and Trusts Group. Given the size of the retirement plans in individual estates, careful planning of beneficiary designations is essential to assure that the wishes of the IRA owner or the plan participant are carried out and that whole classes of beneficiaries are not unintentionally omitted from sharing in the retirement plan benefits.
Howard Esterces is a member of Meltzer Lippe’s Estate and Trusts Group. He examines SCINs and compares them to similar estate planning devices.
Howard Esterces, a member of Meltzer Lippe’s Estate and Trusts Group, discusses compensation and benefits.
The disclaimer can be a helpful tax and estate planning tool if used correctly. Often, the disclaimer is employed as a postmortem remedial device to fend off adverse tax repercussions and other unintended consequences of an estate plan gone awry. Other times, the anticipated use of the disclaimer is consciously incorporated into the estate plan by its drafter to preserve tax and distributive flexibility at the decedent’s death. Although, this article focuses on the application of the disclaimer in the estate tax context, significant non-tax objectives may also justify its use.