Fiduciary Professions Archive
For the Trustee's Ears Only
The attorney-client privilege protects communications between clients and their attorneys by prohibiting their disclosure and admissibility in a judicial...
Being a Fiduciary in the Age of Uncertainty
The interplay among tax laws, investment performance and a beneficiary's wellbeing shapes a fiduciary's responsibilities. When a trustee distributes assets...
Situs at a Glance*
USRAP Uniform Statutory Rule Against Perpetuities GST generation-skipping transfer POA power of appointment bp bonus points PFTC private family trust...
Which Situs is Best in 2012?
The combination of the generous $5 million gift, estate and generation-skipping transfer (GST) tax exemptions (adjusted for inflation) provided in the...
Trusts That Cry for Attention
Over the past several years, a number of state law changes have caused the issue of trust modification/reformation1 to garner more and more attention...
Watch Your Back and Cover Your Tracks
A client's lack of sophistication and guidance regarding trust-owned life insurance (TOLI) can put estate-planning lawyers in the hot seat. Most states...
Fraudulent Transfer Claims
The first bankruptcy case involving an Alaska asset protection trust (APT), In re Mortensen,1 has been decided. This case (we'll refer to it as Mortensen...
Volatility An Impediment for Trustees
Global geopolitical concerns have contributed to an unstable economy and increasingly volatile markets. Excessive volatility adds even more complexity...
Raising the Bar
Dramatic new Securities and Exchange Commission (SEC) disclosure requirements will change the way trustees choose and manage financial advisers. These...
Breaking the Silence
Many wealth management professionals spend a large portion of their time and energy designing elegant, tax-efficient estate plans for their clients. This...
Giving Crummey Notices: Best Practices
Estate planning practitioners regularly include some form of withdrawal rights in irrevocable trusts, exercisable with respect to a specific amount and...
The Elephant in the Room
Family Office Exchange (FOX) has long maintained that an informed and educated client is a better client. This is especially true when it comes to wealth...
Life and Death Decisions
Executors of estates of decedents who died in 2010 face a tough choice under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act...
Two Estates, Two Decisions
The 2010 Tax Act answered many questions that lingered in practitioners' minds throughout 2010....
A Cautionary Tale
Most executors know that there need not be estate tax for decedents dying in 2010. ...
Consider State Tax Regimes, Too
Last summer, one of our clients in his mid-forties died unexpectedly, before we were able to finish helping him with his wealth transfer planning....
Unintended Consequences
What if a donor sets up a family foundation specifically because the donor wanted to avoid paying federal taxes? ...
A Two-phased Approach
Whenever a client comes to us after the death of a loved one, particularly in the case of a surviving spouse, he's typically quite overwhelmed. ...
When Electing Out Makes Sense
Our company, Fiduciary Trust Company International, was appointed executor of an estate of a client who died in 2010. ...
Restorative Payments
In March 2009, Bernard L. Madoff pleaded guilty to federal charges involving a Ponzi scheme....
Estate Tax Now or Capital Gains Tax Later?
To opt or not to opt, that is the question. ...
Making the Election or Not
The challenges of dealing with the choice of tax regimes for 2010 decedents can approach you from many fronts....
When There's a QPRT and GRAT
At our firm, we're facing an unusual situation concerning a client who died in 2010 during the term of a qualified personal residence trust and a grantor retained annuity trust....
A Balanced Solution
When we recommend ways for our clients to reduce their estates, we're mindful that clients generally want a comfortable cushion for retirement. But, providing...
Unintended Consequences
The passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the 2010 Tax Relief Act) has opened an unexpected...
An Ounce of Prevention
A great deal has been written in the last decade about trust-owned life insurance (TOLI) and the responsibilities and obligations of trustees/fiduciaries...
Making a Federal Case?
On Oct. 26, 2009, Internal Revenue Service Commissioner Douglas Shulman, speaking at the annual meeting of the American Institute of Certified Public...
Collaboration From the Family Office Perspective
For those of us in the business of providing client services, success is heavily dependent on our ability to offer the most comprehensive, cutting-edge...
The $52 Million Lunch
Funny things happen in the practice of law. This column will share some of them from over 30 years of my practice with clients all over the world. On...
No Rest for the Weary
The year 2010 may be remembered fondly by some as The Year Without Taxes because on Jan. 1, 2010, all federal estate taxes and generation-skipping transfer...
Managing CLAT Investments
Charitable lead annuity trusts (CLATs) have received considerable attention recently, in light of current low interest rates. If structured correctly,...
Nursing the Sick ILIT
Now more than ever, trustees, and in particular, corporate trustees, face administrative issues that arise in relation to an irrevocable life insurance...
The Trustee's Role in Directed Trusts
Over the last decade, trust law has undergone a transformative evolution. It's becoming commonplace for trust settlors to design so-called directed trusts...
A Shot Across the Bow
Last year, a ruling by the Indiana Court of Appeals, In Re Stuart Cochran Irrevocable Trust,1 sent a shot-across-the-bow warning to trustees trying to...
Family Business Succession Planning
The United States is on the threshold of a major demographic shift. The post-war baby boom generation a group of some 78 million Americans has arrived...
Bringing It Home
Planning for an existing foreign non-grantor trust that has one or more U.S. beneficiaries presents complex challenges for trustees and professional advisors....
Scratching Your Head Over 2010 Estate Plans?
We're now entering the eighth month of 2010 a year in which we've had no estate tax. We're also facing possible legislation and uncertainty on other issues...
Settlor Incompetence and The Trustee's Quandary
It can be difficult on a personal level to watch a client, whom you may have known for years, begin to lose his mental capacity. But if that client is...
Private Equity Investing in Trust
Sophisticated trust portfolios often benefit from direct exposure to active and passive investments made in venture capital (VC) and private equity. However,...
The 2010 Landscape for Fiduciaries
Since Jan. 1, 2010, trustees and personal representatives have faced a new transfer tax landscape one filled with questions but very few answers. For...
Take the LEAPS
When the time comes for your client to sell or gift shares of stock in a privately held company, how do you determine the value? Valuation experts use...
I Do, Act II
Estate planning in the context of second marriages is increasingly common and necessary in the evolving world in which we practice. Estate-planning techniques...
Risk Assessment
Financial professionals do it. Insurance professionals do it. Actuaries certainly do it. Yet we, as tax and estate planning professionals, all too often...
Charging Order
A charging order only allows a creditor the right to attach distributions rather than allowing a creditor to succeed to all of the ownership rights of...
Virtual Partners
Ten years ago, our group began experimenting with the concept of the virtual partner. A virtual partner completes billable work at home and commutes to...
Successor Trustee Liability
In recent years, as the economy has faltered and banks have failed, merged and re-emerged, the fiduciary business with its annuity revenue stream seems...
Which Situs Is Best?
The unsettled estate tax environment and harsh economic climate have created a new competitiveness: to be considered the jurisdiction for trusts and win...
Situs Shopping
Perhaps one of the most noticeable developments I'm seeing in the last couple of years is clients and their advisors paying increasing attention to situs...
Clean House
If Ponzi schemer Bernard Madoff serves no other purpose, he's a stark reminder that anyone acting in a fiduciary capacity must maintain high standards...
A Silver Lining
In the wake of the Supreme Court's Knight decision,1 trustees would have been justified wondering if there would ever again be a use for the line called Itemized Deductions not Subject to the 2% Floor on Form 1041...
Closely Held Business Interests And the Trustee's Duty to Diversify
It's well settled in American jurisprudence governing trust administration that the trustee's duties of due care and prudence...
Driven to Defy Donor Intent?
The Rose Art Museum at Brandeis University in Waltham, Mass., has built an impressive collection of contemporary artists since it opened in 1961. But...
As the Hearse Pulls Away
During the course of an estate's administration, a personal representative performs four basic functions: (1) marshals assets; (2) determines and raises...
Who'll Be Left Standing?
On Feb. 20, 2008, my husband, Peter Nesvold a newly minted partner at Bear, Stearns & Co. Inc. came home and said, I think my firm is going bankrupt....
Tech For Tough Times
Steven J. Best, chief executive officer of Best Law Firm Solutions, has wisely observed that the recent economic hardships only increase the need to have...
The Estate Collar
It was in the depths of the Great Depression that the alternative valuation mechanism was first put into place. Federal lawmakers realized that forcing...
The 505 Fix
There can be serious tensions with beneficiaries when a trustee is required to distribute all of the trust's income currently (meaning, it's a mandatory...
There Will Be Litigation
The wonderful power to adjust bestowed upon trustees by the Uniform Principal and Income Act (UPIA) has a dark side: lawsuits filed by beneficiaries unhappy...
Trustee Powers That Can Cause Tax Problems
Choosing a trustee is one of the most important decisions that clients make for their estate plans. Some trust powers may be critical for tax planning...
Breaking the PTC Logjam
The logjam that for eight years has checked the pace of private trust company (PTC) creations will be dislodged when the Internal Revenue Service finalizes...
Estate Tax on Wrongful Death Claims?
An Illinois appellate decision sets a potentially dangerous precedent suggesting it’s possible...
Trustee's Choice
Proper asset allocation is the cornerstone of prudent investing. But once the allocation is made, fiduciaries have a critical decision to make: How should...
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...
Justice in Hawaii?
Sometimes we like to see the bad guys win for a while who wasn't rooting in a way for Tony Soprano? But we always feel better when the good guys emerge...
Appreciating Beneficiaries
Trusts are proliferating, but advisors are focusing on protecting wealth, not on the interests of beneficiaries. This increases the likelihood that resentful...
Deducting Fees For Investment Advice
One of the most vexing issues in the federal income taxation of trusts over the last 15 years has been questions about the correct treatment of Internal...
Buried Treasure
It is the rarest and most valuable coin in the world, designed by a famed sculptor at the request of President Theodore Roosevelt in 1905. It should never...
Dad Wins No Contest
Some states, such as Florida, ban no-contest clauses in wills as against public policy. A greater number of states allow these measures also known as...
LETTERS TO THE EDITOR
Dear Editor: The article Appreciating Individual Trustees by I. Mark Cohen in the December 2006 edition contained numerous misleading or erroneous statements:...
Know Your Stuff
As the change in the mobility of clients and their assets over the past 30, even 20 years is truly astounding. While it once was unusual for the average...
Human Nature, Both Sides Now
If you do estate and trust litigation for a living, it's easy to begin thinking that greed is ubiquitous. But just when you might harden into cynicism,...
A Dumont-like Horror
Stock concentration cases against fiduciaries just keep getting scarier. The latest fright comes from Hamilton County, Ohio. If the New York case of Dumontsent...
Beware the Power of Attorney
Lawyers get requests for powers of attorney all the time, and they're easy to churn out and then forget. But beware. Powers of attorney also are very...
What Does It Really Mean To Diversify Trust Assets?
Though more than a dozen years have passed since the National Conference of Commissioners on Uniform State Laws approved and recommended that states adopt...
How to Interview A Corporate Trustee
If a client is considering using a corporate trustee as a sole trustee, co-trustee or successor trustee, he'll probably want to interview several institutions...
Deciphering DNI In a Unitrust World
Distributable net income (DNI) has long been a complicated concept for fiduciaries, who in making distributions must consider the income tax consequences...
A Tense Time For Trust Administration
In 2006, courts spoke to two important issues in trust administration. The Dumont case was overturned,1 providing a brief respite for trustees that own...
Beneficiary-Controlled Trusts Can Lose Asset Protection
Advisors promote trusts as an indispensable component of the estate plan. We tout the importance of trusts for credit shelter and generation-skipping...
Appreciating Individual Trustees
An individual relative or friend might be more appropriate to serve as a trustee than a professional. In praising corporate trustees, commentators have...
How to Fulfill Duties And Promote Good
Imagine the American Cancer Society having tobacco company stock in its portfolio. Or picture the Alcoholics Anonymous portfolio owning a brewery. Though...
IRS Rejects UPIA 10 Percent Rule
If an asset is to qualify for the federal estate tax marital deduction as qualified terminal interest property (QTIP), the decedent's surviving spouse...
Delegated Vs. Directed Trusts
Families are becoming more sophisticated about wealth management, incorporating modern trust documents into their estate-planning goals and looking for...
Anticipated: Ruling on PTCs
In the past dozen years, spurred by the Prudent Investor Act and other major new trust laws, families with substantial trust assets (typically $100 million...
Reverse Focardi
In Focardi v. Commissioner,1 the Tax Court has once again shown a taxpayer the door in the case of a grantor retained annuity trust (GRAT) with a revocable...
Dumont Stands
New York's highest court let the decision in Matter of Dumont stand, creating a bit of a mess in New York and adding to the cacophony of recent state...
SunTrust's Woes: It's the Real Thing
Kodak. IBM. Coca-Cola. The names are corporate icons. And these blue-chip stocks, if held in the portfolio of any trust, once meant a life of quiet contentment...
Dumont Reversed
It's the latest ruling in a series of New York decisions on trustee liability for improper retention of concentrated stock positions known, collectively,...
New Dilemmas
Traditionally, there has been tremendous tension between the competing interests of a trust's income and remainder beneficiaries. Investing pursuant to...
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...
RUDKIN AND TRUSTEE'S ADVISORY FEES
One of the most talked about cases among panelists at the Recent Developments-2005 session at this year's Heckerling Institute on Estate Planning, held...
Tough Times
Trustees face many challenges as we begin the year 2006. First, trust institutions are grappling with the anti-money laundering (AML) and bank secrecy...
Storm Surge
is a word that no trustee wants to see next to his name. Yet one consequence of recent natural disasters, most notably Hurricane Katrina, will be a surge...
Trust Protectors
Although trusts are, according to many theories, hundreds of years old, their provisions have changed more in the past 30 years than in the previous 300...
Surprising Decisions
Several recent fiduciary cases have results as unexpected as the ending of an O'Henry short story. A Pennsylvania trustee in a case called Sky Trust1...
Rise of the Purpose Trust
Most estate planners know the three basic elements of a trust: a trustee, a corpus, and one or more beneficiaries. Many commentators regard the presence...
Feuding Fiduciaries
Being a trustee entails risk of personal liability. Being one of a number of trustees can increase the risk. In the legendary Matter of Rothko,1 a fiduciary...
The Funding Dilemma
Executors face a painful dilemma in deciding when to satisfy a pecuniary bequest. If they make distributions too quickly, creditors may hold them liable...
Trustees Everywhere Be Afraid
A New York judge's recent decision in Estate of Dumont1 should give trustees reason to pause and re-evaluate the investment policies and procedures of...
Can We Talk?
The most frequently cited reason for lawsuits against attorneys is poor client communication.1 Comprehensive communication is especially critical in the...
The SNT Trap
Special needs trusts (SNTs) trusts created for the benefit of a disabled beneficiary present exciting opportunities for corporate fiduciaries. They also...
