Wills, Trusts & Estates Prof Blog

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

Wednesday, August 16, 2017

CLE on Estate Administration Boot Camp

0000000 CLEThe National Business Institute is holding a conference entitled, Estate Administration Boot Camp, which will take place on Thursday, August 16, 2017 at the DoubleTree by Hilton Dallas - Love Field in Dallas, TX. Provided below is a description of the event:

Program Description

Everything You Need to Know About Effectively Administering an Estate

Are you fully confident in your knowledge of the latest court and tax rules and the most effective transfer tools to ensure each client's estate is laid to rest according to the decedent's wishes, with minimal tax burden? This comprehensive 2-day instruction will give you all the skills you need to administer estates that include trusts and/or business interests without a hitch. Register today!

  • Don't miss any crucial notice and filing requirements when opening the estate - learn what must be done right away.
  • Get helpful forms and checklists that will help you in administration.
  • Understand how income and estate tax deductions interact and find the most advantageous way to structure the tax returns
  • Learn how to use disclaimers more effectively.
  • Clarify what must be done when the trust becomes irrevocable.
  • Protect your professional reputation with a practical legal ethics guide focused on trusts and estates practice.
  • Prevent mistakes in final petition and ensure each estate is closed quickly and without disputes.

Who Should Attend

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

  • Attorneys
  • Accountants/CPAs
  • Enrolled Agents
  • Certified Financial Planners
  • Trust Officers/Administrators/Managers
  • Paralegals

Course Content

DAY 1

  • Forms of Administration and When They are Used
  • First Steps and Notices, Executor Duties, Opening the Estate
  • Marshalling the Assets
  • Key Intestacy Laws You Must Know
  • Handling Debts and Claims Against the Estate
  • Spouse Elective Share and Disclaimers
  • Trusts That Affect Estate Administration

DAY 2

  • Income Tax Returns
  • Portability and Estate, Gift, GST Taxes
  • Business Interests in Estate Administration
  • Legal Ethics in Estate Administration
  • Closing the Estate and Final Accounting
  • Estate and Trust Contests, Disputes, Challenges

Continuing Education Credit

 

Continuing Legal Education

Credit Hrs State
CLE 12.00 -  OH*
CLE 12.00 -  TX*

International Association for Continuing Education Training – IACET: 1.20

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

* denotes specialty credits

August 16, 2017 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Income Tax, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Monday, August 14, 2017

IRS Rules on Tax Ramifications of Incomplete Non-Grantor Trust

Farm-Agriculture-Cartoon-059The Internal Revenue Service (IRS) addressed income and gift-tax consequences relating to an incomplete non-grantor trust in PLR 201729009. In the case at issue, the settlor created an irrevocable trust in order to benefit himself, his wife, charitable organizations, siblings, and children. The trust instrument provided for a Distribution Committee to disperse income and principal from the trust to named beneficiaries for their health, education, maintenance, and support (HEMS).

After a request for rulings, the IRS concluded that the settlor’s contributions to the trust did not qualify as a gift for federal gift-tax purposes. This characterization entails that distributions from the trust will be treated as a return of the settlor’s property and, as such, will be included in the settlor’s gross estate upon death.

The IRS ruling also held that the powers maintained by the Distribution Committee were such that transfers to the trust were not complete with respect to the trust’s income interest; the relationship between the settlor and the committee allowed the settlor to retain too much power over distributions of income and principal.

See Jillian Merns, IRS Rules on Tax Ramifications of Incomplete Non-Grantor Trust, Wealth Management.com, August 2, 2017.

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

August 14, 2017 in Current Events, Estate Planning - Generally, Gift Tax, Income Tax, New Legislation, Trusts | Permalink | Comments (0)

Friday, August 11, 2017

Death of ‘Stretch’ IRAs Would Mean Loss of Flexibility for Beneficiaries

Uncle-Sam-wants-your-moneyIf the Retirement Enhancement and Savings Act of 2016 becomes law, it may become more difficult to leave a qualified plan account or sizable IRA to beneficiaries without also leaving them with a substantial tax burden. The Act passed through the Senate Finance Committee in 2016 and calls for the abrogation of “stretch” provisions currently available to non-spouse beneficiaries of 401(k)s and IRAs. These provisions allow certain beneficiaries to extend minimum required distributions for as long as they like.

If the legislation moves forward, these accounts would have to be completely emptied in five years of all but $450,000. While this certainly does not work to the benefit of the account-holder, Uncle Sam gains about $3.18 billion in revenue from 2017 to 2026. Although passage of the bill is still very uncertain, if a stretch IRA is part of your estate plan, it may be a good idea to start looking for alternatives.

See Scott M. Dougan, Death of ‘Stretch’ IRAs Would Mean Loss of Flexibility for Beneficiaries, Kiplinger, August 2017.

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

August 11, 2017 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Tuesday, August 8, 2017

Article on Foreign Trusts, the Panama Papers and the Shewan Report

Michael Littlewood recently published an Article entitled, Foreign Trusts, the Panama Papers and the Shewan Report, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

The New Zealand tax system is so structured as to allow the country to be used as a tax haven. Specifically, it allows foreigners to use trusts established in New Zealand (referred to as “foreign trusts”) to avoid and evade the tax they would otherwise have to pay in their home country. It would seem possible, too, for foreigners to use such trusts for other illicit purposes, in particular money-laundering and financing terrorism. In April 2016 the publicity given to the so-called Panama Papers attracted attention to this aspect of the New Zealand tax system. The government responded by appointing a distinguished Wellington accountant, John Shewan, to advise. He recommended that the law be changed and the government accepted his recommendations. This article explains how the foreign trust rules work, and how the amending legislation is designed to preclude this form of abuse.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

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

August 8, 2017 in Articles, Estate Planning - Generally, Estate Tax, Income Tax, Trusts | Permalink | Comments (0)

Friday, August 4, 2017

Behind an $18 Billion Donation to a New York Charity, a Shadowy Chinese Conglomerate

28DB-HNA-master768Guan Jun donated 29% of HNA Group of China to a private foundation based in New York. These shares represent an equivalent of over $18 billion. It remains unclear how Jun, living in relative modesty, came to own such a large portion of one of China’s largest conglomerates. The ownership structure behind HNA is somewhat opaque, which creates problems for potential American investment companies subject to know-your-customer-rules. Bank of America recently abstained from doing any business with the Chinese conglomerate, citing issues with its murky shareholder structure and noting probable connections within the Chinese government.

The large transfer also elicits concerns with taxes and the possibility that HNA is using the donation as a means to avoid certain tax liabilities at home and abroad.

See Michael Forsythe & Alexandra Stevenson, Behind an $18 Billion Donation to a New York Charity, a Shadowy Chinese Conglomerate, The New York Times, July 26, 2017.

August 4, 2017 in Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Wednesday, August 2, 2017

CLE on Estate Administration Boot Camp

0000000 CLEThe National Business Institute is holding a conference entitled, Estate Administration Boot Camp, which will take place August 03, 2017, at the Holiday Inn Memphis-University Of Memphis in Memphis, TN (It's in Memphis). Provided below is a description of the event:

Program Description

Everything You Need to Know about Effectively Administering an Estate

Are you fully confident in your knowledge of the latest court and tax rules and the most effective transfer tools to ensure each client's estate is laid to rest according to the decedent's wishes, with minimal tax burden? This comprehensive 2-day instruction will give you all the skills you need to administer estates that include trusts and/or business interests without a hitch. Register today!

  • Don't miss any crucial notice and filing requirements when opening the estate - learn what must be done right away.
  • Get helpful forms and checklists that will help you in administration.
  • Understand how income and estate tax deductions interact and find the most advantageous way to structure the tax returns
  • Learn how to use disclaimers more effectively.
  • Clarify what must be done when the trust becomes irrevocable.
  • Protect your professional reputation with a practical legal ethics guide focused on trusts and estates practice.
  • Prevent mistakes in final petition and ensure each estate is closed quickly and without disputes.

Who Should Attend

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

  • Attorneys
  • Accountants/CPAs
  • Enrolled Agents
  • Certified Financial Planners
  • Trust Officers/Administrators/Managers
  • Paralegals

Course Content

DAY 1

  • Forms of Administration and When They are Used
  • First Steps and Notices, Executor Duties, Opening the Estate
  • Marshalling the Assets
  • Key Intestacy Laws You Must Know
  • Handling Debts and Claims Against the Estate
  • Spouse Elective Share and Disclaimers
  • Trusts that Affect Estate Administration

DAY 2

  • Income Tax Returns
  • Portability and Estate, Gift, GST Taxes
  • Handling Distributions
  • Business Interests in Estate Administration
  • Legal Ethics in Estate Administration
  • Closing the Estate and Final Accounting

Continuing Education Credit

 

Continuing Legal Education – CLE: 12.00 *

International Association for Continuing Education Training – IACET: 1.20

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

* denotes specialty credits

August 2, 2017 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

A Short Story of Jack, The Beanstalk and Survivor IRAs

JackBeanstalkIt is possible to leave IRAs, 401ks, and other qualified plans to beneficiaries upon death. If done correctly, it is possible to avoid substantial portions of income and other various taxes. When placed in a trust, an initial $500,000 distribution from a qualified plan can pay out $1.5 million over a beneficiary’s lifetime. The assets from the qualified plan are not taxed when rolled over to the trust, but only when distributed to the beneficiary of the trust. This type of planning can be complex and it is best to seek professional advice for help.

See George, A Short Story of Jack, The Beanstalk and Survivor IRAs, Fox+Mattson, June 19, 2017.

August 2, 2017 in Estate Administration, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Trusts | Permalink | Comments (0)

Friday, July 28, 2017

Canada Debates Whether Gift of Leibovitz Photos Is a Tax Dodge

Tims2Oh, sweet Canada. Home to dancing fountains of maple syrup, a Tim Horton’s on every corner, and the friendliest, most apologetic people in the world. What could go wrong in this heavenly wonderland? Oddly enough, a recent issue in the wintery haven concerns a gift. Bureaucrats in the Canadian government are having a hard time trying to decide if they should sign off on a donation of American portrait photographer Annie Leibovitz’s art to a gallery in Nova Scotia. The original donor is seeking a $20 million tax deduction after paying only $4.75 million for the 2,070 portraits in the collection. The collection’s value has been independently verified on multiple occasions, but the Canadian Cultural Property Review Board has refused to give the donation its stamp of approval. The director of the museum, Nancy Noble, is hopeful the board will come through on their fourth try.  

See Sopan Deb & Colin Moynihan, Canada Debates Whether Gift of Leibovitz Photos Is a Tax Dodge, The New York Times, July 25, 2017.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

July 28, 2017 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Tuesday, July 25, 2017

Little Tax Plan Promises Big Benefits For Wealthy Clients

LafferOn April 26, the Trump Administration laid out a terse proposal for sweeping tax law changes. The current plan bears little resemblance to the ideals Trump espoused on the campaign trail, but it still offers many benefits for affluent taxpayers. The proposed tax cuts would eliminate the estate tax, the alternative minimum tax, and the 3.8% net investment income tax. The cuts would also reduce the highest marginal income tax rates for businesses and individuals. While these tax reductions would benefit many Americans, there is some concern among planners and advisors that there are additional implications that may negatively impact some clients.

See Eric L. Reiner, Little Tax Plan Promises Big Benefits For Wealthy Clients, Financial Advisor, May 22, 2017.

July 25, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Friday, July 14, 2017

What To Do If You Inherit An IRA

IRAAmericans have an astounding $7.9 trillion invested in Individual Retirement Accounts (IRAs). If you happen to inherit one of these accounts, take the time to research the requirements for contributions and withdrawals. The tax rules surrounding inherited IRAs are complex and mistakes can be costly. Factors such as whether the account is a traditional IRA or Roth IRA will determine how long money can be maintained in the IRA on a tax-deferred basis (traditional) or a tax-free basis (Roth). IRS publication 590-A provides some basic information about traditional and Roth IRAs. IRS publication 590-B discusses requirements for asset withdrawals.

See Ashlea Ebeling, What To Do If You Inherit An IRA, Forbes, July 10, 2017.

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

July 14, 2017 in Estate Planning - Generally, Income Tax | Permalink | Comments (0)