Wills, Trusts & Estates Prof Blog

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

Tuesday, November 6, 2018

Beating GST Tax with HEETs

GstFor the client that wishes to leave assets to their grandchildren, they are often hindered by the generation skipping transfer tax, or GST tax. This tax is the IRS's method of taxing this special type of transfers, but advisors and attorneys have their own method of assisting their clients with this predicament.

A Health and Education Exclusion Trust (HEET), as the name implies, can only pay for the medical and/or educational needs of the clients’ grandchildren and their descendants. But there is also another catch: one of the designated beneficiaries is required to be a charitable organization, and it is recommended to transfer 6-10% of the trust income to the charity annually. This stipulation allows the trust to be different than other generation-skipping trusts and  pass IRS scrutiny.

Unlike a 529 plan, a HEET can be used to fund education at any level, from kindergarten to graduate school. Though the trust cannot directly benefit the grandchild, it can do so by taking away this particular financial burden from the grandchild's parents. The trust can also pay insurance premiums, so another load off of a parent's shoulders.

See Beating GST Tax with HEETs, Wealth Counsel, October 26, 2018.

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

November 6, 2018 in Current Affairs, Estate Planning - Generally, Generation-Skipping Transfer Tax, Trusts | Permalink | Comments (0)

Monday, November 5, 2018

CLE on Estate Planning and Administration: The Complete Guide

CLEThe National Business Institute is holding a conference entitled, Estate Planning and Administration: The Complete Guide, on Wednesday, January 23, 2019 - Thursday, January 24, 2019 in San Diego, California. Provided below is a description of the event.

Program Description

Find Out How Key Estate Planning Tools are Drafted and Implemented

Every client's estate is unique in its assets composition, family dynamics and future needs, but all are ruled by the same principles and are subject to the same tax and legal limitations. In this comprehensive legal guide, experienced attorney faculty will guide you through the process of estate planning and administration and show you how to select the best trust instruments and wield them skillfully to avoid mistakes at probate. They will also teach you how to properly administer the estate and tackle potential mistakes of improperly drafted documents, changed circumstances and newly arising conflicts. Become fully prepared to protect your client's legacies - register today!

  • Get an update on the current tax regime and other key regulations.
  • Get the case off on the right foot with a thorough and thoughtful client intake.
  • Compare key trust structures and their effect on the grantor and beneficiary tax future burdens.
  • Help clients plan for and fund long-term care.
  • Ensure confidentiality before and after the client's death.
  • Get useful checklists for key dates and tasks in estate administration.
  • Clarify what can be distributed through non-probate transfers and how to do it correctly.
  • Explore creditor issues in estate administration and get trouble-shooting tips from the pros.
  • Find out how much planning can still be done after the client's passing.
  • Discuss the duties and powers of fiduciaries, their limits and real-life application.
  • Get tips for closing the estate to prevent future disputes.

Who Should Attend

This basic-to-intermediate level seminar on estate planning and administration is designed for:

  • Attorneys
  • Accountants and CPAs
  • Paralegals
  • Tax Managers
  • Trust Officers
  • Certified Financial Planners
  • Investment Advisers

Course Content

DAY 1: ESTATE PLANNING AND TRUST BASICS

  1. Key Laws and Client Intake/Goal Setting
  2. Planning for Long-Term Care and End-of-Life Decisions
  3. Testamentary Documents - Drafting Do's and Don'ts
  4. Common Trust Structures and When They're Used
  5. Transfers During Life and Inter-Vivos Trusts
  6. Tax Consequences of Trusts

DAY 2: PROBATE AND ESTATE ADMINISTRATION

  1. Probate Process Overview
  2. Marshalling Assets and Dealing with Creditors
  3. Post-Mortem Tax Planning Options
  4. Legal Ethics in Estate Practice
  5. Trust Administration and Termination Basics
  6. Closing the Estate

November 5, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

Thursday, October 25, 2018

CLE on Tax Reform: The Big Changes You Need to Know

CLEThe National Business Institute is holding a video webcast entitled, Tax Reform: The Big Changes You Need to Know, on Thursday, November 15, 2018, at 9:00 a.m. to 4:00 p.m. Central. Provided below is a description of the event:

Program Description

Don't Miss Out on This Critical Update!

The new tax law is the most significant change to the federal tax code in the past several decades, ushering in sweeping impacts for businesses and individuals alike. Do you know how it will impact your clients? How can you help clients take advantage of the new regime? Our seasoned faculty will detangle the tax changes and explore how you can apply them to your practice. Start planning now and help clients minimize their tax liability - register today!

  • Find out what we know about the tax code changes, as well as what the unexpected results may be.
  • Discover what businesses should do to adjust to the new tax law.
  • Learn what the new changes mean for real estate and buying and selling a business.
  • Delve into estate planning implications for high-net-worth individuals.
  • Find out what tax reform means for LLCs and other pass-through entities.
  • Explore the impacts of tax reform on families and average Americans.

Who Should Attend

This program is designed for attorneys. Accountants, paralegals and other professionals may also benefit.

Course Content

  1. Overview
  2. Individual Income Tax Provisions
  3. What Tax Reform Means for LLCs and Other Pass-Through Entities
  4. Corporate Tax Provisions
  5. The New Tax Law's Effects on Real Estate, and Buying and Selling a Business
  6. Estate, Gift and GST Tax Provisions
  7. Legal Ethics: Attorney Fiduciary Liability, Fraud and More

October 25, 2018 in Conferences & CLE, Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Saturday, October 13, 2018

CLE on Estate Planning: The Ultimate Guide

CLEThe National Business Institute is holding a webcast entitled, Estate Planning: The Ultimate Guide, on Tuesday, December 11, 2018, at 9:00 a.m. - 4:00 p.m. Central. Provided below is a description of the event.

Program Description

Grow a Successful Estate Planning Practice

Are you ready to grow your own successful estate planning practice or looking for a practical refresher? This program will become your go-to guide. From client intake through will, trust and tax planning, you will receive tips, sample forms and answers to your most pressing questions to help you excel. Gain insight on everyday issues estate planning attorneys face - register today!

  • Learn how to clarify client goals and develop a sound estate planning strategy.
  • Get practical will and trust drafting skills to speed up the process and give the testator's last wishes power.
  • Explore the functions and mechanics of major trust structures - and make certain you choose the right tool for each job.
  • Walk through the basics of tax planning with simple and useful tips.
  • Give each provision full power with precise word choices - get sample forms to speed up the process.
  • Help your clients make the tough medical decisions regarding long-term care, end-of-life and organ donation.
  • Stave off conflicts of interest with a clear determination of who your client is from the start.

Who Should Attend

This program is designed for attorneys. It will also benefit estate planners, trust officers, accountants and CPAs, paralegals, and tax professionals.

Course Content

  1. CLIENT SCREENING AND INTAKE
  2. KEY ELEMENTS OF EFFECTIVE WILLS
  3. BASIC TAX PLANNING
  4. DOCUMENTING LONG-TERM CARE, INCAPACITY AND END-OF-LIFE DECISIONS
  5. TRUSTS 101
  6. WHO IS THE FIDUCIARY?
  7. ETHICAL CONSIDERATIONS

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 6.00 -  AK*
CLE 6.00 -  AL*
CLE 6.00 -  AR*
CLE 6.00 -  AZ*
CLE 6.00 -  CA*
CLE 7.00 -  CO*
CLE 6.00 -  CT*
CLE 6.00 -  DE*
CLE 7.00 -  FL*
CLE 6.00 -  GA*
CLE 6.00 -  HI*
CLE 6.00 -  IA*
CLE 6.00 -  ID*
CLE 6.00 -  IL*
CLE 6.00 -  IN*
CLE 7.00 -  KS*
CLE 6.00 -  KY*
CLE 6.00 -  LA*
CLE 6.00 -  ME*
CLE 6.00 -  MN*
CLE 7.20 -  MO*
CLE 6.00 -  MP
CLE 6.00 -  MS*
CLE 6.00 -  MT*
CLE 6.00 -  NC*
CLE 6.00 -  ND*
CLE 6.00 -  NE*
CLE 6.00 -  NH*
CLE 7.20 -  NJ*
CLE 6.00 -  NM*
CLE 6.00 -  NV*
CLE 7.00 -  NY*
CLE 6.00 -  OH*
CLE 7.00 -  OK*
CLE 6.00 -  OR
CLE 6.00 -  PA*
CLE 7.00 -  RI*
CLE 6.00 -  SC*
CLE 6.00 -  TN*
CLE 6.00 -  TX*
CLE 6.00 -  UT*
CLE 6.00 -  VA*
CLE 6.00 -  VT*
CLE 6.00 -  WA*
CLE 7.00 -  WI*
CLE 7.20 -  WV*
CLE 6.00 -  WY*

Continuing Professional Education for Accountants

Credit Hrs State
CPE for Accountants 7.00 -  AZ
CPE for Accountants 7.00 -  NY*
CPE for Accountants 7.00 -  WA
CPE for Accountants 7.00 -  WI

 * denotes specialty credits

October 13, 2018 in Conferences & CLE, Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Trusts, Wills | Permalink | Comments (0)

Monday, September 24, 2018

CLE on New Tax Basis Reporting Requirements in Estate Administration

CLEThe National Business Institute is holding a teleconference entitled, New Tax Basis Reporting Requirements in Estate Administration, on Wednesday, November 7, 2018, at 11:00 a.m. - 12:30 pm. Central. Provided below is a description of the event:

Program Description

Are You Following the New Tax Rules?

The way tax basis of assets is reported during estate administration has changed. Are you confident in your knowledge of the basis consistency rules to ensure every estate is administered correctly? Clarify the new rules and get practical tax-saving tips from experienced faculty - register today!

  • Compare the new basis consistency rules and the old law.
  • Adopt your tax planning and reporting practices to reflect the new requirements.
  • Determine what asset valuation method to use for basis reporting purposes.

Who Should Attend

This tax law update is designed for attorneys. It will also benefit accountants and CPAs, estate planners, trust officers, and paralegals.

Course Content

  • New Basis Consistency Rules vs. the Old Law
  • What Executors/Personal Representatives Need to Know NOW
  • New Information That Must be Included
  • Valuation of the Assets for Basis Reporting Purposes
  • Reporting to Beneficiaries

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 1.50 -  AK
CLE 1.50 -  AL
CLE 1.50 -  AR
CLE 1.50 -  AZ
CLE 1.50 -  CA*
CLE 1.50 -  CO
CLE 1.50 -  CT
CLE 1.50 -  DE
CLE 2.00 -  FL*
CLE 1.50 -  GA
CLE 1.50 -  HI
CLE 1.50 -  IA
CLE 1.50 -  ID
CLE 1.50 -  IL
CLE 1.50 -  IN
CLE 1.50 -  KS
CLE 1.50 -  KY
CLE 1.50 -  LA
CLE 1.50 -  ME
CLE 1.50 -  MN
CLE 1.80 -  MO
CLE 1.50 -  MP
CLE 1.50 -  MS
CLE 1.50 -  MT
CLE 1.50 -  NC
CLE 1.50 -  ND
CLE 1.50 -  NE
CLE 1.50 -  NH
CLE 1.80 -  NJ
CLE 1.50 -  NM
CLE 1.50 -  NV
CLE 1.50 -  NY*
CLE 1.50 -  OH
CLE 2.00 -  OK
CLE 1.50 -  OR
CLE 1.50 -  PA
CLE 1.50 -  RI
CLE 1.50 -  SC
CLE 1.50 -  TN
CLE 1.50 -  TX
CLE 1.50 -  UT
CLE 1.50 -  VA
CLE 1.50 -  VT
CLE 1.50 -  WA
CLE 1.50 -  WI
CLE 1.80 -  WV
CLE 1.50 -  WY

Continuing Professional Education for Accountants

Credit Hrs State
CPE for Accountants 1.50 -  AZ
CPE for Accountants 1.50 -  NY
CPE for Accountants 1.50 -  WA
CPE for Accountants 1.50 -  WI

Financial Planners – Financial Planners: 1.50

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 1.50 *

* denotes specialty credits

September 24, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Monday, September 10, 2018

Top 10 Estate Planning Mistakes We See and How to Avoid Them

Top10The authors decided to explain 10 estate planning mistakes instead of focusing on one. Explaining each mistake facially rather than diving in depth may make it easier for many to distinguish the errors they are making in their own estate plans.

  • Joint Accounts.
    • The presumption of a joint account is that the funds will belong to the other owner once the first owner passes away, which may have not been their intent. A power of attorney registered for the account is a more viable option.
  • I Love You Wills.
    • Though the gift and estate exemption is portable, the generation skipping transfer (GST) tax is not, and the spouse that inherits all of the deceased's assets may not be able to transfer assets tax free to the next generation.
  • Receiving an Inheritance Outright.
    • Inheriting through a trust may be able to solve a slew of issues, from benefit qualifications to creditors.
  • Failing to Update Beneficiary Designations.
    • For assets that do not pass through a will or trust, updating beneficiary designations are a must. Change occur in a lifetime, and the designations have the ability to reflect that.
  • Naming an Estate as Beneficiary of an IRA or Qualified Retirement Plan Benefit.
    • A preference is to generally afford clients this flexibility by naming a revocable trust as beneficiary instead.
  • Failing to Title Out of State Real Estate to a Revocable Trust.
    • An ancillary probate can be avoided in the other state if the real estate is owned by a client’s revocable trust, rather than in the client’s name.
  • Not Considering a Roth IRA Conversion.
    • If an individual does not plan to use all of the funds in their IRA, converting to a Roth IRA can be beneficial to pass on to heirs and compound their funds tax-free.
  • Delaying Large Charitable Gifts Until Death.
    • It is usually better for clients to make significant gifts to charity during their lifetimes rather than wait until their deaths.
  • Gifting Highly Appreciated Assets During Lifetime.
    • This can avoid the step-up basis for capital gains for heirs or beneficiaries.
  • Failure to Create an Estate Plan.
    • This is the number one mistake, and truly everybody needs an estate plan.

See Rebecca Rosenberger Smolen and Amy Neifeld Shkedy, Top 10 Estate Planning Mistakes We See and How to Avoid Them, The Legal Intelligencer, September 4, 2018.

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

September 10, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Trusts, Wills | Permalink | Comments (0)

Tuesday, September 4, 2018

Impact of US Tax Reform on Cross-Border Estate Planning

Foreign flagsThe massive tax reform of 2017 temporarily increased the gift and estate tax exemption, which will revert to its previous limit of $5.49 million in December of 2025. Transfer taxes (gift, estate, and generation-skipping transfer taxes) are now twice what they were for United States citizens and those that are domiciled in the states, and allows high net worth individuals within those guidelines to transfer assets to family members and trusts tax free.

Non-U.S. decedents with U.S. situs assets continue to have an exemption of only $60,000 from the U.S. estate tax and a small per-donee annual exclusion from the gift tax, currently $15,000 per donee per year. The act also left in place the special succession tax applicable to “covered expatriates," former U.S. citizens and green card holders, to current U.S. citizens.

The act also significantly reduces the U.S. corporate income tax rate to 21%, down 35%. Now non-United States citizens can hold real estate within the country through a foreign corporation and not feel the brunt of corporate taxation so harshly. The legisation makes a number of changes to the controlled foreign corporation (CFC) regime. Historically, this regime has required certain U.S. shareholders of foreign corporations to pay tax on passive income that the corporation earns, whether or not the corporation makes distributions.

See Amy E. Heller & Erin M. Fischer, Impact of US Tax Reform on Cross-Border Estate Planning, Skadden.com, June 19, 2018.

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

September 4, 2018 in Current Affairs, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Wednesday, August 8, 2018

Warning: $10 Million Estate Tax Exemption Can Overfund Trusts at Death and Harm Your Surviving Family

TrustThe increase in the generation skipping transfer (GST) tax exemption in the recent legislation may appear to be a great addition to a wealthy person's estate plan, but it could lead to issues if not calculated properly for wills or trusts executed prior to 2018. The death of one spouse could result in a "lopsided" subtrust structure that is contrary to the deceased spouse's intent.

Before the increase, married couples' estate planning documents often directed the estate tax exemption amount to pass to a "credit shelter," "family," "A-B," or "bypass" trust—usually for the benefit of a spouse and/or children—with the excess passing either to the surviving spouse outright or to a marital trust for the surviving spouse's benefit. If a married couple fails to update a "bypass trust" estate plan executed before 2018, and if one spouse dies in 2018, then all or most of the deceased spouse's assets could end up funding the bypass trust(s) without any excess flowing outright to, or in trust for, the surviving spouse (as was intended upon execution of the will or trust).

See John R. Cella, Jr., Warning: $10 Million Estate Tax Exemption Can Overfund Trusts at Death and Harm Your Surviving Family, Ward and Smith, August 3, 2018.

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

August 8, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Generation-Skipping Transfer Tax, New Legislation, Trusts | Permalink | Comments (0)

CLE on Using Trusts in Estate Planning and Asset Protection

CLEThe National Business institute is holding a 2-day conference entitled, Using Trusts in Estate Planning and Asset Protection, on Wednesday, November 28, 2018 - Thursday, November 29, 2018 at the Embassy Suites by Hilton Boston at Logan Airport in Boston, Massachusetts. Provided below is a description of the event:

Program Description

Successfully Handle Your Client's Trust Needs

The wide array of trusts available, combined with the numerous issues clients can bring to the table, can make choosing and using the right tool a daunting task - but it doesn't have to be. This insightful, two-day seminar will guide you through how to effectively use trusts for estate planning and asset protection. Explore a variety of planning tools that will help you tailor a trust that fits your client's specific situation. Don't miss this opportunity to make sure your trusts are thoroughly on point - register today!

Find out how to select the best trust option for each unique situation.

Protect retirement accounts with the use of IRA trusts.

Use trusts to help clients qualify for Medicaid while protecting their assets.

Discover ways to structure special needs trusts so beneficiaries still qualify for public benefits.

Learn how to minimize your client's tax burdens with the use of defective trusts.

Properly handle the administration of a trust.

Clarify who your client is to avoid conflicts of interest and other ethical violations.

Who Should Attend

This basic-to-intermediate level seminar is designed for professionals involved in structuring and administering trusts:

Attorneys

Accountants and CPAs

Trust Officers

Tax Managers

Wealth Managers

Paralegals

Course Content

Day 1

Trust Overview

Determining Which Trust to Use

Grantor Trusts: When and How to Use Them

IRA Trusts: Protecting Retirement Accounts

Using Trusts to Qualify for Medicaid

Charitable Trusts: Setting Aside Assets and Tax Planning

Day 2

Special Needs Trusts: Planning for Disabled Beneficiaries

Asset Protection Focus: Analysis and Tools

Using Irrevocable Life Insurance Trusts (ILITs)

Tax Planning with Trusts

Administering Trusts

Making Changes to Trusts

Remaining Ethically Compliant

Continuing Education Credit

International Association for Continuing Education Training – IACET: 1.20

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

Professional Achievement in Continuing Education – PACE: 14.00

* denotes specialty credits

August 8, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Trusts | Permalink | Comments (0)

Monday, August 6, 2018

CLE on Estate Administration From Start to Finish

The National Business Institute is holding a conference entitled, Estate Administration From Start to Finish, on Tuesday, September 11, 2018, at the Best Western Plus Ramkota Inn in Sioux Falls, North Dakota. Provided below is a description of the event.

Program Description

A Step-By-Step Guide to Estate Administration

Designed for attorneys who are new to estate administration or need a basic refresher, this course will provide you with a comprehensive overview of estate administration, including proper asset valuation and distribution, taxation, and account closing procedures. You'll also learn how to correctly deal with thorny estate administration debt issues, including jointly held assets, business ownership and complex tax issues. Equip yourself with real-life, practical knowledge to ensure you are fully prepared to handle the entire estate administration process from start to finish - register today!

Learn how to meet every deadline, follow procedures and complete essential forms.

Identify key estate administration pitfalls you need to avoid.

Acquire strategies to ensure you can help your clients through every step of the probate process.

Manage your client's entire estate administration procedures properly and effectively.

Learn how to tackle complex estate administration issues such as tax issues, jointly held assets and will contests.

Understand how to properly transfer and distribute assets.

Explore proper procedures and processes when dealing with insurance claims and debt during estate administration.

Gain a better understanding of the probate court's procedures so that you can avoid common pitfalls and mistakes.

Get the latest information on allowances and elections against the will.

Identify how to properly distribute assets to minors, surviving spouses and trusts.

Who Should Attend

This basic-to-intermediate level seminar is designed for professionals who want to be more effective in the estate administration process, such as:

Attorneys

Paralegals

CPAs and Accountants

Financial Planners and Wealth Managers

Tax Professionals

Trust Officers

Course Content

Initial Steps and Information Gathering

Marshalling Assets

Handling Creditor Claims and Debt

Complex Issues in Estate Administration

Handling Estate Administration Tax Issues

Distribution and Closing of the Estate

Ethics and Estate Administration

Continuing Education Credit

Financial Planners – Financial Planners: 8.00

International Association for Continuing Education Training – IACET: 0.70

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 8.00 *

Professional Achievement in Continuing Education – PACE: 8.00

* denotes specialty credits

August 6, 2018 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Trusts, Wills | Permalink | Comments (0)