Sunday, July 20, 2014
The American Law Institute Continuing Legal Education (ALI CLE) is holding a CLE entitled, International Trust and Estate Planning, on October 20-21 in San Francisco, CA. Here is why you should attend:
If you provide tax and trust advice to U.S. clients with international connections or to foreign clients with U.S. connections (or you don’t currently counsel such clients, but wish to start doing so), you must attend this program!
Set in San Francisco, International Trust and Estate Planning comprises more than 13 hours of instruction, including two hours of ethics, and gives attendees the tools they need to not only stay competitive, but also to practically advise clients on rapidly-changing legislative, regulatory, and enforcement developments in this complex area.
An all-star faculty – including a representative of the Internal Revenue Service who addresses current offshore compliance and enforcement initiatives – examines the practical application of the complex U.S. income, gift, and estate tax rules affecting noncitizens living or investing in the U.S., or U.S. clients with foreign property, foreign financial accounts, interests in foreign entities, or who are beneficiaries of foreign trusts or trust-like vehicles. The course also includes segments focusing on country-specific developments outside the U.S., and multi-national initiatives related to tax compliance, bank secrecy, and the prevention of money laundering.
In addition to the critical substantive information presented through an engaging, interactive format, registrants have the unique opportunity to discuss their legal questions and network with faculty members and attendees from around the world.
Thursday, May 8, 2014
Brandon A.S. Ross (Proskauer Rose LLP) recently published an article entitled, Practical Pointers to Obtain the U.S. Foreign Death Tax Credit, 28 Prob. & Prop. 60 (May/June 2014). Provided below is the introduction:
With the rise of internationalization, the use of the U.S. foreign death tax credit (the “Credit”) has grown. The Credit is available for U.S. citizens or residents to avoid double taxation of certain property located outside of the United States at death. The Credit applies to a transfer of property at death that is subject to a transfer tax substantially similar to the U.S. federal estate tax levied by the foreign country, state, jurisdiction, or political subdivision based on the property’s location in that foreign jurisdiction. For purposes of this article, the terms “foreign country,” “state,” “jurisdiction,” or “political subdivision” are used interchangeably. The Credit’s usefulness has increased as society has globalized and advances in technology have made the world smaller. Despite the Credit’s enlarged role in estates, guidance for the Credit’s use from the IRS, the Department of the Treasury, and the courts is scarce. This article offers some practical pointers to obtain the Credit.
Tuesday, May 6, 2014
Bankrate, a financial services company, has compiled a list of the 10 best states to retire in based on weather, taxes, cost of living, crime rates, quality of healthcare, and general well-being. Surprisingly, Florida and California did not make the list. The states that ranked highest in the compiled criteria for best retirement environment are:
- South Dakota
- North Dakota
See Melanie Hicken, The Best States to Retire in Are a Little Surprising, CNN, May 5, 2014.
Sunday, May 4, 2014
Margaret Ryznar (Associate Professor of Law at Indiana University Robert H. McKinney School of Law) & Angelique Devaux (French Licensed Attorney (Diplômée Notaire)) recently published an article entitled, Au Revoir, Will Contests: Comparative Lessons for Preventing Will Contests, 14 Nev. L.J. 1 (Fall 2013). Provided below is their introduction:
Despite the continuous evolution of American probate law, will contests remain common and there is no assurance that a will, once executed, will ultimately be upheld. In fact, it is not clear that will contests have even been effectively minimized. The most common grounds for will contests are undue influence, testamentary capacity, and fraud, allegations of which invalidate many wills today. Such contests have significant costs, which include the failure to give effect to the testator's intent, high litigation and decision costs, and the use of limited judicial resources. As a result, one of the most significant challenges in American probate law is the frequent inability to honor testamentary intent due to will contests brought by disgruntled relatives and friends.
In contrast, France's legal system has nearly eliminated will contests on the grounds of undue influence and fraud. In French wills law, very few cases arise involving litigation of the validity of a will, and, of those that do, all concern issues of conformity with formalities rather than lack of capacity, fraud, or undue influence. While France is currently addressing other issues in its wills law, those related to will contests have largely been resolved.
In general, French wills law is far more dynamic in comparison to its American counterpart, largely due to the influence of those who draft wills, known as notaires. Notaires raise substantive legal issues at annual conventions arising from their work with clients, contributing to the development of the law. This process has contributed to the near elimination of will contests based on fraud and duress.
The introduction of a separate system of professionals like the notaires would be difficult given the role of American attorneys and the federalist system that facilitates the development of state wills law. Nevertheless, there are several key elements of the French system that could be introduced to decrease the number of American will contests. These insights can provide guidance for the states to improve their wills law.
In exploring how the American probate system could benefit from certain aspects of its French counterpart, Part II of this article addresses the current American law that facilitates will contests despite efforts to prevent them. Part III analyzes France's more successful efforts to prevent will contests. Finally, Part IV considers the lessons from a comparative analysis of American and French wills law for the prevention of will contests.
Thursday, May 1, 2014
Barbara Hauser recently published a book entitled, International Estate Planning: A Reference Guide, (August 2013). Provided below is a description of the book found on the Juris Publishing, Inc. Web Store:
International Estate Planning is a practical and authoritative guide to a tremendously complex field. It provides indispensable information to lawyers, accountants, and other practitioners who work on estate planning with clients who have issues involving other countries. The book is divided into two main parts: Part One addresses the tax issues; Part Two addresses the non-tax issues. The focus of the book is on estate planning to avoid wealth transfer taxes with references to income taxes.
Topics include clients who may:
• Own homes outside the U.S.
• Have children or parents who live in other countries
• Have a spouse who is not a citizen
• Work for a multinational corporation in an office abroad
• Be “foreigners” who have investments in the United States
Wednesday, April 23, 2014
There is an increasing number of offshore Court judgments that consider an offshore trustee’s liability to third parties and the rights of a trustee and a trust protector to an indemnity from the trust assets if there is a third party claim.
Please see the article below for a summary of recent decisions concerning trustee liability and the rights of indemnity against trust assets. Decisions concerning trustee liability include decisions by the Royal Court of Guernsey, the Supreme Court of Bermuda, and the Royal Court of Jersey. Decisions concerning the rights of indemnity against trust assets include decisions by the Isle of Man High Court and the Royal Court of Jersey.
See Mark Chudleigh, Chen Foley, Nick Miles, and Alex Potts, Round-Up of Recent Decisions Relevant to Trustee and Protector Liability and Indemnities, JD Supra, Apr. 18, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
Friday, April 18, 2014
Iran recently had an unlikely visitor: a private plane with a small American flag on its tail parked at the Mehrabad Airport in Tehran. In Iran, all but a few U.S. and European business activities are banned, so the aircraft likely would have needed prior approval from the Treasury Department’s Office of Foreign Assets Control.
Everything else about the plane, and why it was it Iran appears to be a mystery. What we do know is that the plane is held in trust by the Bank of Utah, a community bank in Ogden with 13 branches throughout the U.S. The Bank of Utah acts as a trustee for 1,169 aircraft, more than just about any other bank. An executive of the Bank of Utah said he was not allowed to disclose the identity of the plane’s investors. “As fiduciary, we must keep information confidential when it comes to the beneficiary.”
See Michael Corkery, Jessica Silver-Greenberg, and Thomas Erdbrink, Iran Gets an Unlikely Visitor, an American Plane, but No One Seems to Know Why, The New York Times, Apr. 17, 2014.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
Friday, April 11, 2014
According to a new study by UHY International, “Old” world economies are charging higher estate and inheritance taxes than “New” world economies.
Governments in established European economies are becoming increasingly reliant on the income streams from inheritance taxes. The study found that the UK and Ireland impose the highest inheritance tax of all major economies. The inheritance tax threshold in the UK has been frozen at £325,000 (US $544,862), which is actually below the average London house price of £409,881 (US $686,058). From an estate worth $3 million, the UK takes 25.8% and Ireland takes 26%.
By contrast, the US provides a $5.34 million exemption that is adjusted annually for inflation. And with the anti-tax movement continuing to gain ground, more US states are likely to increase their exemption or repeal their estate taxes. Australia, India, Israel, New Zealand, and Russia have repealed their inheritance taxes in an effort to encourage more wealth creation and transmission.
See Isaac M. O’Bannon, The Worst Countries for Inheritance Taxes, CPA Practice Advisor, Apr. 7, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
Monday, April 7, 2014
The American Law Institute Continuing Legal Education (ALI CLE) is presenting a CLE entitled, FATCA and Trusts: What You Need to Know and How to Prepare for the July 1 Deadline, on Thursday, April 17, 2014. Here’s why you should attend:
There are few topics more confusing for those trying to implement Foreign Account Tax Compliance Act (FATCA) than the treatment of trusts and personal investment companies.
Recent regulatory actions have changed the rules on the treatment of trusts under FATCA and how they must be treated for nonresident alien (NRA) withholding and reporting purposes. Expert faculty at this CLE seminar on FATCA will cover the relevant issues and provide practical advice on how to tame the confusion.
Recently, a New Zealand High Court found that the former city councilor of Auckland City did not perform his fiduciary duty. Former Auckland City Councilor, Greg Moyle, failed to keep the beneficiaries of a $1.4 million dollar estate updated and informed about his investments. The investments were made with farmer Murray Dean's money. Mr. Dean died ten years ago, but in his will named Mr. Moyle as his executor.
Under the will, Mr. Dean left his estate to his wife and children from his first marriage. The will instructed that the estate should generate income for his wife's lifetime and after her death be distributed evenly among his children. After Mr. Moyle failed to provide information about how the money was being invested, Mr. Dean's children filed suit.
Eventually, Mr. Moyle provided the information, but the court forced him to pay court costs. The fees he paid himself were more than $100,000 in seven years; he claims the fees were standard in managing the sizable estate. Additionally, the court revealed unauthorized payments. General manager for NZ Financial Planning, Craig Dealey, stated the company only learned of the court case a short time after Mr. Moyle resigned and did not agree with the way Mr. Moyle handled the situation.
See David Fisher, Conduct Over Will Criticised by Judge, NZ Herald, April 5, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.