Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Friday, July 20, 2018

CLE on Estate Planning for the Family Business Owner 2018

CLE
The American Legal Institute is holding a conference entitled, Estate Planning for the Family Business Owner 2018, Thursday, November 1, 2018 - Friday, November 2, 2018 at the Atlanta Marriott Marquis in London, Georgia. Provided below is a description of the event:

Why You Should Attend

The only national program specifically designed for those who represent family business owners!   Whether you advise or own a family business, or are an estate planner looking for a deeper understanding of the closely-held business, this one-of-a-kind advanced conference is for you!   Attend this nationally recognized program and explore the latest techniques in family business succession planning, learn how customize your plan for specific situations, and discover new ways to implement your plans.   Leading practitioners in estate planning, tax, insurance, and employee benefits will give you advanced strategies to recognize and evaluate family business issues and enhance your skills at designing customized succession plans for your family business clients.  

What You Will Learn

Highlights of this year's program include:  

Planning in light of tax reform, lower income taxes, and higher estate tax exemptions

Critical income tax issues and planning strategies, including tax-savings opportunities when passing wealth from one generation to the next

Valuing an equity interest in a family business

Motivating your family business client to engage in thoughtful succession planning

Deferred compensation and equity-based compensation plans

Advising on family harmony issues that can impact succession plans

Sophisticated trust techniques for lifetime transfers

  For in-person attendees: An optional breakfast workshop on the second morning provides an opportunity to dive deeper into income tax issues not covered during the regular program. Don't miss this chance to discuss your questions with experienced faculty in an informal setting!  

Who Should Attend

This comprehensive estate planning for family business CLE program is designed for estate lawyers, accountants, those who advise privately-owned business, and those who own private businesses.  
Register two or more and SAVE! Register one person for the in-person course at full price and save 40% on all additional in-person registrations for this course from your organization. Separate discounts are also available for group webcast registrations. Click on "Group Rates" to register. (Valid on new registrations only; discounts may not be combined.)

Study Materials

Going green in 2018! Course materials will be available in electronic format for download the week before and during the course.  Print materials will not be distributed.  All registrants are advised to bring laptops or tablets to the course to view the course materials, including updates.

July 20, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Income Tax, Trusts, Wills | Permalink | Comments (0)

Wednesday, July 18, 2018

CLE on Estate Planning for Farmers and Ranchers

CLEThe National Business Institute is holding a conference entitled, Estate Planning for Farmers and Ranchers, on Tuesday, July 24, 2018 at the Ramada Midtown Grand Island in Grand Island, Nebraska. Provided below is a description of the event:

Program Description

How to Protect Farm Assets and Transfer Them to Heirs

Estate planning for farms and ranches requires specialized knowledge and tools to ensure the best client representation. This legal course will give you the knowledge to preserve the farms and other assets your clients have worked their entire lives to acquire and build. Explore the challenges and opportunities unique to estate planning for farmers to help make good sense of difficult legal and financial policies. Learn what you need to know about estate taxes, wills, trusts, government programs, and other key elements. Help your clients take care of their estate planning needs and their family's future - register today!

  • Take full advantage of government farm programs and valuation discounts.
  • Explore the deciding factors in choosing the right business entity when planning ownership transfer.
  • Analyze the liquidity of farm assets and augment each plan accordingly.
  • Employ all available tools for transferring assets and preserving wealth.
  • Tackle harvest yield predictions and other unique factors of farm asset valuation.

Who Should Attend

This basic-to-intermediate level seminar is designed for:

  • Attorneys
  • Estate and Financial Planners
  • Accountants and CPAs
  • Tax Preparers
  • Trust Officers
  • Paralegals

Course Content

  1. Business Structure Choice and Conversion - Including Sample Documents
  2. Income and Gift Tax Planning
  3. Medicaid (Long-Term) Planning for Farmers and Ranchers
  4. Planning for a Gradual Transfer within the Family
  5. Transfers upon Death: Key Estate Administration Concerns

Continuing Education Credit

Continuing Legal Education – CLE: 6.00

Financial Planners – Financial Planners: 7.00

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 7.00 *

* denotes specialty credits

July 18, 2018 in Conferences & CLE, Elder Law, Estate Administration, Estate Planning - Generally, Income Tax, Trusts, Wills | Permalink | Comments (0)

Tuesday, July 17, 2018

Your Mid-Year Estate Planning Checklist

BeachSummer can be a busy time with kids out of school and vacations in full swing, but it can also be a prime period to review your estate plan and see if there needs to be any adjustments. Below is a checklist that could assist to make sure you cover the essential points.

  • Review your existing Will and any trust agreements.
  • Consider whether your named fiduciaries are still appropriate.
  • Review your beneficiary designations.
  • Consider income tax planning.
  • Review existing insurance coverage (life, homeowners, umbrella, disability, long-term care, etc.).
  • Review your investments – and your investment advisors.
  • Review how your assets are titled.
  • Fund your trust(s)
  • Determine/confirm your estate tax domicile.
  • Get educated – meet with your estate planning attorney and financial professionals to discuss all of the above.

See Lisa P. Staron, July 11, 2018 - Trusts and Estates Group News: Your Mid-Year Estate Planning Checklist, Murtha Law, July 11, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

July 17, 2018 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

Monday, July 16, 2018

CLE on 30 Steps to Perfect Probate

The National Business Institute is holding a conference entitled, 30 Steps to Perfect Probate, on Thursday, October 11, 2018 - Friday, October 12, 2018, at the Embassy Suites by Hilton Jacksonville Baymeadows in Jacksonville, Florida. Provided below is a description of the event:

Program Description

Gain Valuable Strategies for Every Step of the Probate Process

Are you confident you're taking advantage of every strategic opportunity the probate process has to offer? Experienced faculty will share their insights into maximizing the benefits of each step at this essential program. With a special focus on strategic decision-making to minimize tax burdens, speed up the process and alleviate conflict; this guide to probate is just what you need to take your practice to the next level. Register today!

  • Spend two full days learning how to strategically navigate the probate process.
  • Shore up your knowledge with a tactical guide to probate inventory - and leave no stone unturned.
  • Get tips from the pros on how to tackle creditor claims and troubleshoot debt repayment.
  • Minimize tax burdens for both the decedent and the beneficiaries with a full guide to timely and prudent tax planning and reporting.
  • Maximize the use of exceptions when handling Medicaid estate recovery.
  • Hone your final disbursements skills to prevent disputes and re-openings.
  • Use probate litigation to its fullest advantage.

Who Should Attend

This two-day, intermediate level seminar is designed for:

  • Attorneys
  • Accountants/CPAs
  • Trust Officers/Administrators/Managers
  • Tax Professionals

Course Content

  1. Probate Process Overview and First Steps
  2. Executor Strategies
  3. Will Admission Techniques
  4. Inventory, Appraisement and Management Tactics
  5. Creditor Claims: Tips From the Pros
  6. Medicaid Estate Recovery Insights
  7. Insolvent Estate Tips and Tricks
  8. Tax Minimization Tactics
  9. Final Accounting Secrets
  10. Distributions: Insights From the Pros
  11. Estate Closing Strategies
  12. Legal Ethics
  13. Probate Litigation Tactics

Continuing Education Credit

Continuing Legal Education – CLE: 14.50 *

International Association for Continuing Education Training – IACET: 1.20

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 14.00 *

* denotes specialty credits

July 16, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Intestate Succession, Professional Responsibility, Wills | Permalink | Comments (0)

Saturday, July 14, 2018

Unlike Some Feared, TCJA Did Not Block a Trust's Ability to Deduct Expenses Incurred Due to Property Being Held in Trust

TrustThe passage of the Tax Cuts and Jobs Act of 2017 (TCJA) eliminated the ability of individuals to claim miscellaneous itemized deductions beginning with their 2018 income tax returns. Many professionals and clients worried that these deductions included those from property held in trust. IRC §67(g) provides that, "Notwithstanding subsection (a), no miscellaneous itemized deduction shall be allowed for any taxable year beginning after December 31, 2017, and before January 1, 2026."

Notice 2018-61 clarified how the rule of miscellaneous itemized deductions, defined at at IRC §67(b) as any “itemized deduction” other than those listed from §67(b)(1)-(12), would impact trusts and estates. The notice also explains that certain types of deductions are not miscellaneous itemized deductions to the trust or estate and thus not barred as a deduction.

The trust will also be able to claim a deduction for itemized deductions that are not miscellaneous itemized deductions.  As the Notice points out: "For example, section 691(c) deductions (relating to the deduction for estate tax on income in respect of the decedent), which are identified in section 67(b)(7), remain unaffected by the enactment of section 67(g))."

See Ed Zollars, TCJA Did Not Block a Trust's Ability to Deduct Expenses Incurred Due to Property Being Held in Trust, Current Federal Tax Developments, July 13, 2018.

Special thanks to Mark J. Bade (CPA, GCMA, St. Louis, Missouri) for bringing this article to my attention.

July 14, 2018 in Estate Administration, Estate Planning - Generally, Income Tax, New Legislation, Trusts | Permalink | Comments (0)

Thursday, July 12, 2018

Aligning Client Lifestyle, Dreams And Legacy Goals With Wealth Objectives

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-07-12/360f065f-4af7-4e93-ae15-68871d6a3fc7.pngFinancial advising companies have a quite peculiar way to categorize their clientele. They determine that the "mass market" are clients that are worth $1 million or less, and that the "high net worth" category are those that have a net worth of more than $20 million. Two vastly different types of companies assist these types of clients, and that often means that the middle section of "lower millionaires" that could be overlooked.

These type of millionaires are often the self-made ones that are more determined and driven than the ones that have had their fortunes come to them through inheritance. Their dreams may be harder to define and it is the job of their advisor to help align their dreams with their reality.

Legacies for self-made millionaires can be tricky, as they understand the need for hard work but also the desire to enjoy the fruits of that labor. It may not just comprise of assets and accounts, but values that the client wants to pass on to their loved ones are desired organizations.

Any good financial advisor will consult with their client about their lifestyle: how they spend their money and how they save it, what brings them comfort and ease, how they like to live on a daily basis. Advisors must know these items if they expect to tell the client what’s necessary to achieve his or her goals. 

See Greg Powell, Aligning Client Lifestyle, Dreams And Legacy Goals With Wealth Objectives, Financial Advisor, July 6, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

July 12, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Income Tax, Trusts, Wills | Permalink | Comments (0)

Wednesday, July 11, 2018

Article on From Switzerland with Love: Surrey’s Papers and the Original Intent(s) of Subpart-F

SwitzerlandNir Fishbien recently published an Article entitled, From Switzerland with Love: Surrey’s Papers and the Original Intent(s) of Subpart-F, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article:

For the first time since 1913, and as part of the 2017 tax reform, Congress adopted a tax regime that exempted from U.S. taxation dividends from foreign subsidiaries. By doing so, Congress abandoned the general principle that U.S. residents should be subject to tax on all income “from whatever source derived.” This shift marked a good occasion for considering the reasons the United States taxed such dividends in the first place. In 1962, Congress enacted a new law, also known as ‘Subpart-F’, which subjected certain earnings of foreign subsidiaries of American parent corporations to current-base taxation. This was a deviation from the general tax principle of tax deferral, under which earnings of foreign subsidiaries are taxed only upon repatriation of these earnings (by a dividend, for example). The new legislation was the result of a political compromise. While Treasury supported a wide-scale elimination of tax deferral, Congress eventually adopted a much narrower law, eliminating tax deferral only in cases where it was abused by using it to avoid otherwise owed U.S. taxes.

Seven internal Treasury Department reports found in the archive of Harvard Law School Library reveal the dramatic sequence of events that led to the legislation of Subpart-F, one of the most prominent international tax reforms the United States had ever known. The reports unequivocally support the notion that the idea behind Subpart F was initially formed mainly due to the deteriorate U.S. Balance of Payment position, and that its “original intent”, as designed by its main architect, Assistant Secretary of the Treasury, Stanley S. Surrey, was to eliminate tax deferral and protect the U.S. tax base. This was based on the principles of equity, efficiency (Capital Export Neutrality), and elegance. Congress, on the other hand, rejected the proposal and adopted a much more limited in scope legislation, mainly due to the concern that eliminating tax deferral would result in a competitive disadvantage to American corporations operating abroad.

Based on the reports, as well as the controlling legal and economic concepts of that time, I argue that Congress was mistaken in limiting the original proposal to eliminate tax deferral. This mistake was the result of relying on overly-emphasized and exaggerated competitive concerns, instead of on concrete tax and sound fiscal policies.

July 11, 2018 in Current Affairs, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

Monday, July 9, 2018

Article on Basis Step-Up Planning: A Double-Edged Sword

PandpGriffin H. Bridgers recently published an Article entitled, Basis Step-Up Planning: A Double-Edged Sword, Probate and Property Magazine, Vol. 32 No. 4, July/August 2018. Provided below is an abstract of the Article:

Estate tax planning has, for decades, revolved primarily around maximization of the estate and gift tax applicable exclusion amount, with tax reform also focusing primarily on increases to that amount. With the recent enactment of the Tax Cuts and Jobs Act, P.L. 115-97, we have seen this exclusion increase from $675,000 per taxpayer in 2001 to $11.18 million per taxpayer in 2018. This has dramatically reduced the impact of the estate, gift, and generation-skipping transfer taxes. As a result, the focus of tax planning will likely continue to shift to income taxation. One of the biggest modern goals of tax planning now is maximizing the opportunity to obtain a step-up in income tax basis for family assets at least at the death of the client. The recent doubling of the estate tax applicable exclusion amount is certain to increase this type of planning.

While such transfer are driven by a desire to save income taxes, practitioners may neglect the state law implications of this type of planning, which we will refer to in the remainder of this article as "basis step-up planning." While the effects of such planning can differ from state to state, this article addresses some of the broad issues that should be considered before engaging in substantial basis step-up planning.

For purposes of this article, with respect to powers of appointment, reference is made primarily to the Uniform Powers of Appointment Act (UPAA), as published by the Uniform Law Commission in 2012. For purposes of analyzing powers of appointment, the following defined terms are derived from section 102 of the UPAA. The "donor" is the person creating a power of appointment, the "power holder" is the person in whom the power of appointment is created by a donor, "permissible appointee" means the person in whose favor the power of appointment may be exercised, and "appointive property" refers to the property over that the power of appointment may be exercised. A general power of appointment is generally defined in section 102 of the UPAA as being a power which can be exercised in favor of the power holder, the power holder's estate, a creditor of the power holder, or a creditor of the power holder's estate.

In addition, with respect to trusts, reference is made primarily to the Uniform Trade Code (UTC), as last amended by the Uniform Law Commission in 2010. Reference is also made to the Uniform Probate Code (UPC), as last amended by the Uniform Law Commission in 2010.

July 9, 2018 in Articles, Current Events, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation, Trusts | Permalink | Comments (0)

Saturday, July 7, 2018

Article on Constituencies and Control in Statutory Drafting: Interviews with Government Tax Counsels

TaxShu- Yi Oei and Leigh Osofsky recently published an Article entitled, Constituencies and Control in Statutory Drafting: Interviews with Government Tax Counsels, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article.

Tax statutes have long been derided as convoluted and unreadable. But there is little existing research about drafting practices that helps us contextualize such critiques. In this Article, we conduct the first in-depth empirical examination of how tax law drafting and formulation decisions are made. We report findings from interviews with government counsels who participated in the tax legislative process over the past four decades. Our interviews revealed that tax legislation drafting decisions are both targeted to and controlled by experts. Most counsels did not consider statutory formulation or readability important, as long as substantive meaning was accurate. Many held this view because their intended audience was tax experts, regulation writers, and software companies, not ordinary taxpayers. When revising law, drafters prioritize preserving existing formulations so as to not upset settled expectations, even at the cost of increasing convolution. While Members, Member staff, and committee staff participate in high-level policy decisions, statutory formulation decisions are largely left to a small number of tax law specialists.

Our findings carry important implications for statutory interpretation, affirming prior research, but also calling into deeper question arguments for textualism and the validity of certain interpretive canons. Our findings also have important implications for the design of our tax system, illuminating the distributive tradeoffs inherent in drafting practices. Finally, our findings reveal a contrast between public expectations about the legislative process and how the process actually works, underscoring underexplored questions about what makes this process legitimate.

July 7, 2018 in Articles, Current Affairs, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Thursday, July 5, 2018

Article on Advice for Jeff Bezos: Social Welfare Organizations as Grantmakers

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-07-05/24c5ff6c-3b6f-4893-a83e-8c4b6757bae6.pngDavid S. Miller recently published an Article entitled, Advice for Jeff Bezos: Social Welfare Organizations as Grantmakers, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article:

This paper responds to Jeff Bezos’ request for philanthropic ideas, but with a suggestion for the structure of his grant making. Gifts of appreciated stock should be made to section 501(c)(3) organizations only to the extent that Bezos will be able to use the charitable deduction that the donation generates before it expires. A social welfare organization should receive all other gifts of appreciated stock.

For taxpayers who cannot use a charitable deduction, or are willing to forgo the deduction for significantly greater flexibility, social welfare organizations are the ideal vehicle for grant making. Gifts of appreciated property to them are exempt from tax on the built-in gain and, for super wealthy taxpayers, this exemption may be hundreds of times more valuable than an income tax deduction. Social welfare organizations also are not subject to the private foundation rules, and may engage in unlimited amounts of lobbying and limited amounts of political activity. Donors to social welfare organizations are not subject to gift tax and, with some planning, can avoid estate tax on the donations.

Foreign social welfare organizations can be used to avoid UBTI and, for donors seeking anonymity, failure to file a Form 990 for three years will convert a foreign social welfare organization into a foreign corporation that, while technically taxable, can avoid all U.S. federal income tax.

Social welfare organizations are much better vehicles for the super-wealthy than section 501(c)(3) organizations because the exemption of capital gains tax on the donation of appreciated property is a far more valuable tax benefit than the charitable deduction. Ending that exemption for donations to section 501(c) organizations would restore the traditional hierarchy to section 501(c) and help address income inequality.

July 5, 2018 in Articles, Current Affairs, Estate Planning - Generally, Income Tax | Permalink | Comments (0)