Estate Planning
The Net, Net Gift
Practitioners are well-aware that lifetime gifts are more tax-efficient than transfers at death. But during the past seven years there's been a possibility...
Transferring Art When No Charity Is Involved
Taxes are never fun but unexpected taxes are especially annoying. If a Florida resident sells a painting through a worldwide auction house, which holds...
Rolling Short-term GRATs Are (Almost) Always Best
As the Internal Revenue Code's Section 7520 rate dropped this year to near-record lows (down to 3.2 percent in May 2008), some estate planners began recommending...
Practitioners Weigh In On 2 Percent Floor Debate
With the Internal Revenue Service on the verge of issuing final regulations,...
Section 2053 Proposed Regs
In an effort to provide uniformity and certainty in the valuation of claims for estate tax purposes, the Department of Treasury issued proposed regulations...
Gift Tax Nightmares
Think back to a time long, long ago, before the adequate disclosure rules of 1997, before the changes in the generation-skipping transfer (GST) tax deemed...
The SCIN-GRAT
Estate planners can learn from financial planners. For years, financial planners have used hedging techniques to reduce risk or to guarantee a desired...
Boulware Yipee! But Remember Lurie
For the first time, the U.S. Supreme Court has asserted that it not only believes in the taxpayer rights enunciated more than 70 years ago by Judge Learned...
My Crystal Ball
Let's look at the recent past, the better to see what the future of the estate tax will be in the years 2009, 2010, 2011 and beyond. My predictions about...
GRAT Effectiveness
Low Internal Revenue Service discount rates make this an ideal time to use grantor retained annuity trusts (GRATs), as it's easier now to get over the...
Father Does Not Always Know Best
The shock of actor Heath Ledger's untimely death has passed, but questions still linger. Although only 28 when he died, Ledger had a will. Yet the multi-millionaire...
Opt Out of QTIP?
A partial interest in property left by a decedent to a surviving spouse, such as an income interest, can lead to a credit for tax on prior transfer (CTPT)...
True to Form
During Leona Helmsley's lifetime, the real estate mogul and hotel magnate was reviled for allegedly saying only the little people pay taxes, then going...
TAX LAW UPDATE
David A. Handler, a partner in the Chicago office of Kirkland & Ellis LLP, reports: 5 percent discount for fractional interest in artwork There's a resolution...
Tax Law Update
David A. Handler, partner, and Margaret L. Hudgins, associate, in the Chicago office of Kirkland & Ellis report: Final and proposed qualified severance...
Pepperidge Farm Legacy
On June 25, 2007, the Supreme Court agreed to hear Knight v. Commissioner1 to decide whether trusts and estates can fully deduct the fees they pay for...
Disclaimer QTIP Trusts
Consider a not uncommon scenario. The date is Jan. 1, 2008. Bob Savvy is the sole shareholder of Family Fortune, Inc., an S corporation. Family Fortune...
Surviving and Thriving In the Tax Patent Era
Just as things seemed to be quieting down)after the Pension Protection Act of 2006, Jalong came the latest challenge to the peace of the estate-planning...
Estate Tax Reform?
While estate tax reform doesn't seem as pressing these days as the Iraq war or immigration, it is an important enough issue that members of the U.S. Senate,...
TAX LAW UPDATE
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, has this report: Estate tax value of lottery winnings is determined under the...
Trust Remodeling
does not truly mean Today, trustees and beneficiaries of an irrevocable trust no longer need to blindly accept the trust's terms but instead should consider...
How Big a Relief Is Roski?
In 1976, Congress enacted Section 6166 of the Internal Revenue Code so that, when a business owner died, his closely held business wouldn't have to be...
Pre-Mortem Probate
Pre-mortem probate surely that's an oxymoron? A will becomes effective only upon the death of its maker. To probate a person's last will and testament,...
A Graceful Exit
On April 17, 2007, the nation lost a grande dame of the arts and culture: Kitty Carlisle Hart, chair of the New York State Council on the Arts from 1976...
Des Americains en France
Thomas Jefferson did it in the 1790s. Ernest Hemingway did it and wrote about it in the 1920s. Today, as well, many Americans move to France to live....
Planning for Clients With Multiple Sclerosis
About eight months ago, my wife was diagnosed with multiple sclerosis (MS). We immediately started to learn everything we could about the disease, so...
Tax Law Update
David A. Handler, partner in the Chicago office of Kirkland & Ellis, LLP, reports: Fractional interest in artwork discounted for cost to partition. Based...
Tax Law Update
From David A. Handler, partner in the Chicago office of Kirkland & Ellis, LLP, we have this update: Proposed regulations for Internal Revenue Code Section...
Deathbed Opportunities
Estate planners have new opportunities to save taxes for their clients using deathbed planning techniques in states that have decoupled their estate taxes...
Defined-Value Clauses
Whenever a client wants to cap gift tax exposure, planners should consider using a defined-value clause implemented by use of an escrow trust. A defined-value...
Tax Law Update
From David A. Handler, partner in the Chicago office of Kirkland & Ellis, LLP, we have this report: Hester: Assets improperly held by decedent are includible...
IRS Okays Turning Total Return on Its Head
Many estate-planning attorneys have used total return trusts to cope with falling yields in an effort to balance the income beneficiary's need for income...
Sidestepping 2035
It's been a stable of estate planning for many years to have an irrevocable life insurance trust own life insurance. But advisors are careful to warn...
Dynasty Trusts: The Basics
A dynasty trust can offer significant benefits, but achieving these benefits is not simple. Crafting a well-constructed dynasty trust requires the planner...
LETTERS TO THE EDITOR
Dear Editor: The purpose of this letter is to address the February 2007 article The Preferred Method by Lance M. Hall. In that article, Hall not only...
Tax Law Update
From David A. Handler, partner in the Chicago office of Kirkland & Ellis, LLP, we have this update: Never say On March 13, Catherine V. Hughes, an attorney...
The Swiss Annuity
Asset protection planning is a moving target. Practitioners must constantly be aware of case developments and changes in the law, which must be reflected...
Tax Law Update
David A. Handler, a partner in the Chicago office of Kirkland & Ellis LLP, reports: Congressional Research Service (CRS) statistics. For all federal lawmakers'...
Lawyers' Group Protests The Appraiser Penalties
The Pension Protection Act of 2006 (PPA)1 imposes new penalties on appraisers that are deemed to have made substantial or gross valuation misstatements....
LETTER TO THE EDITOR
Dear Editor: The purpose of this letter is to address the December 2006 article Beneficiary-Controlled Trusts Can Lose Asset Protection by Charles Harris...
TAX LAW UPDATE
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, reports: Change to UBTI rule for CRTs Legislation passed in December 2006 now...
Basis Boosting
For years, practitioners have employed the estate-planning strategy known as sale to a grantor trust.1 Yet there's still substantial uncertainty and debate...
Civil Unions In New Jersey
Estate planning for New Jersey's more than 22,0001 same-sex couples has undergone several seismic changes for the better since 2004. First, the state...
Field Notes of A Family Business Consultant
Sam Beemer had asked his two sons to come to a family business meeting. Having just celebrated his 70th birthday, he was feeling his mortality.1 And he'd...
Bobby
The star-studded movie Bobby has put the untimely death of Robert F. Kennedy back in the news of late. But really, the Kennedys, even those long-deceased,...
Face the Fear
Businesses intended to remain family-held after the death of the founder need planning that goes far beyond the orderly and tax-efficient transfer of...
Tax Law Update
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, reports: Eighth Circuit affirms Korby. The U.S. Court of Appeals for the Eighth...
Burdens
With continuing confusion about transfer tax repeal or reform, estate planners have at least one constant and true certainty: compliance. Recently, requirements...
Local Solutions, Global Impact
If there was a theme in international estate planning in 2006 it might be local is global. Countries (principally in Europe) made changes that were largely...
Perpetual Trust States The Latest Rankings
If I had to rank the 23 perpetual trust jurisdictions, top honors would be awarded in this order: South Dakota is number one; Delaware is a close second;...
Private Annuity Regs
Andrew M. Katzenstein, a partner in the Los Angeles office of Katten Muchin Rosenman LLP, reports: Changes proposed to regulations (Treasury Regulations...
TAX LAW UPDATE
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, reports: Technical background on proposed regulations for tax treatment of annuity...
Got Real Estate?
Whatever happens to the value of real estate in coming years, one thing is certain: It has become and will remain a large, important part of wealthy clients'...
Lillie Rosen Revisited
Google Estate of Lillie Rosen and you'll get about 20,200 results. The number and breadth of websites devoted to Lillie Rosen and her family limited partnership...
Patenting Tax Strategies
If you were listening on May 20, 2003, you might have heard the collective gasp of tax practitioners across the country. On that day, the United States...
Tax Law Update
From David A. Handler in the Chicago office of Kirkland & Ellis LLP, we have this report: No general power of appointment under state law. In Private...
Report from the Front: Defending Discounts
There's some good news in the ongoing war with the Internal Revenue Service over family limited partnership (FLP) discounts: IRS agents are settling practically...
Revocable GRATs
Although the grantor retained annuity trust (GRAT) is an excellent estate-planning technique, it can be complicated to create, depending upon the client...
Crummey Powers Can Increase Your Income Tax
Perhaps no estate-planning tool is more subject to the law of unintended consequences than the ubiquitous Crummey1 power. But, although there can be estate,...
Offshore, Legitimately
Offshore planning has gotten a lot of bad press lately.1 It's getting slammed in the U.S. Senate. This August, a Senate subcommittee held a week-long...
Ninth Circuit Treads On an Established Right
In recent years, asset protection planning has won its rightful place as a legitimate specialty, aimed at curtailing the reach of potential, future creditors....
Rules of Engagement
In The Curmudgeon's Guide To Practicing Law, author Mark Herrmann points out that You cannot answer a legal question without knowing the context in which...
Marching Off a Cliff
As Election Day 2006 approaches, state politicians increasingly set their sights on a familiar political enemy: taxes. While all taxes make popular targets,...
How to Undo An ILIT, If You Really Have To
Over the past few years, our clients' estate and life insurance planning have become far more complicated than they bargained for. Even if clients' personal...
Double Standards
The Organisation for Economic Co-operation and Development (OECD) has released a seminal report on tax information collection and exchange practices in...
TAX LAW UPDATE
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, reports on property that satisfies the test for a qualified personal residence...
New Push-Pull Into 529 Plans
Two recent legislative developments may enhance the attractiveness of Internal Revenue Code Section 529 savings accounts over other methods of saving...
Four Chosen Words
In theory, a trust is administered to effectuate a grantor's intentions for establishing it. In practice, most trusts don't accomplish this goal. That's...
The Gift That Shook the World
Advisors often have trouble convincing the wealthy to make charitable gifts while they're still alive. Indeed, for years, Ann Landers, the famous personal...
Alternate Uses For Self-Settled Trusts
Many advisors assume that domestic asset protection trusts (DAPTs) self-settled trusts established in the United States typically to protect trust assets...
Foreign Reporting: Get It Right
As estate planners, we love helping people, and as attorneys, we need to bill hours. So when we can help people and bill hours at the same time, you'd...
Tax Law Update
From David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, we have this report: Negotiation is not required for a transaction to be...
Tax Law Update
From David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, we have this report: Post-death distribution from retirement plan is not...
BRITS ATTACK TRUSTS
From G. Warren Whitaker, a partner in the New York office of Day, Berry & Howard LLP, we have this report: The budget proposal submitted in March by the...
Beyond Hubert
Most estate planners are aware that under Internal Revenue Code Section 642(g), estate administration expenses may be taken as estate tax deductions or...
Missed It By That Much
Can a man savvy enough to have a telephone in his shoe decades before the invention of the cell phone ever be out of touch? Sadly, Don Adams the comedian...
Tax Law Update
From David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, we have this report: Gift is incomplete, but trust is not a grantor trust....
Eliminate a Trust's State Income Tax
Many advisors are not aware that their clients might use Delaware trusts for state income tax planning. Delaware law can enable individuals residing in...
Exit Planning for Resident Aliens
Much is written about pre-immigration planning, and for good reason. There are many steps that can be taken to minimize U.S. taxes before getting on a...
Tax Law Update
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, reports: A citizen of a U.S. possession is not a U.S. citizen for estate-tax...
What If You Die, And Then Have Children?
Since the first test tube baby was born in 1978, tremendous advances have been made in the science of assisted reproduction. Thousands of infants are...
Private Equity Comes of Age
High-net-worth individuals are increasingly investing in private equity because they can expect greater returns from it than from public equities, and...
Private Foundations And Reserved Powers Trusts
People and assets increasingly cross international borders. Wealthy families are doing business and moving to places they might not have imagined a decade...
Sabotaged
When drafting an estate plan, it's critical to be aware of any buy-sell or other agreements that may be binding on the client's estate at death. While...
Use GRATS to Transfer An S Corp. to the Kids
The grantor retained annuity trust (GRAT), statutorily allowed by Congress since 1990, can transfer part or all of a wealthy person's business to the...
There Went the Sun
George Harrison, internationally renowned for his music, spirituality and philanthropy, might have been known as the quiet Beatle, but the last few years...
Tax Law Update
From David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, we have this report: Prepaid tuition qualifies for gift tax exclusion. Internal...
The Power of Grantor Trusts
Even the most sophisticated estate planners may be missing the point of grantor trusts. It's a risk-free, transfer-tax free, effortless wealth transfer...
The No-Tax Dynasty Trust
Virtually all of us in the estate-planning community regularly use life insurance trusts and dynasty trusts to achieve huge estate tax savings. And these...
Throw Mama From the Train
It just got harder to be old and anything short of wealthy. Chapter 2 of the new Deficit Reduction Act of 2005 (DRA) focuses exclusively on long-term...
TAX LAW UPDATE
From David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, we have this report: Keeping it real. In Estate of W. Hughes, T.C. Memorandum...
A Brass Ring for IRD
Long-term capital gains and distributions from traditional individual retirement accounts (IRAs) exist in separate constellations of the tax universe.1...
The Incapacitated Trustee
Any trusts and estates attorney who has been in practice for more than a few years is likely to have dealt with an incapacitated trustee. A common problem...
Get FIT
Wealthy grandparents and parents have learned to fear trust fund babies and with good reason. Trust fund babies are infamous for leading pointless, consumer-oriented,...
TAX LAW UPDATE
From David Handler in the Chicago office of Kirkland & Ellis, we have this report: Bequest intended to qualify for marital deduction. In Estate of Sowder...
The Big News
Two in 2005 had enormous ramifications for estate planning. The first was actually a nonevent; the dog didn't bite the man: The Republicans failed to...
Letters of Wishes
Upon accepting a trust, a trustee may be given a non-binding letter of wishes by the settlor.1 Such statements are designed to offer trustees of discretionary...
A Well-Intentioned Mistake: Revenue Procedure 2005-24
Revenue Procedure 2005-241 published April 18, 2005 and effective as of March 30, 2005 is among the most controversial rulings promulgated by the Internal...
Private Foundations'Investing Options
Private foundations are usually organized as trusts or not-for-profit corporations. When choosing between the two, advisors tend to focus on ease of formation...
Coping Mechanisms
So, is estate planning an endangered profession or what? The sword of permanent estate tax repeal has been hanging over planners' heads for more than...
