By Jonathan G. Blattmachr, Esq. & Martin M. Shenkman, CPA/PFS, AEP (Distinguished), MBA, J.D. Reproduced with Permission by and Courtesy of Leimberg Information Services, Inc. (LISI). For information about how to subscribe to LISI, click here. “The election of Donald J. Trump as our 45th President was largely unexpected. It is difficult to forecast what that will mean during his term, and, perhaps, his second term. However, he has proposed wide-ranging changes to the nation’s tax system which will affect virtually all Americans and their advisors. Estate planners in particular face a dramatic impact on their practices.” EXECUTIVE SUMMARY: The…
Investment Opportunities Involving Private Foundations And Pension Plans
Download Printable Article By Bruce Givner, Esq. Introduction. Private foundations (a particular type of which are charitable remainder trusts) and pension plans are attractive structures since they both involve (i) tax deductible contributions and (ii) no tax on the funds accumulating in them. Despite their obvious advantages, we find that clients shy away from adopting them due to the tax laws’ restrictions on what they can do with the funds invested in the two structures. Let’s first discuss the significant advantages of each. Then we’ll discuss the restrictions and at least hint at the ways to exploit those limits. Private…
The Viability of Delaware Dynasty Trusts After the Kloiber Case
Download Printable Article By Steven J. Oshins Esq., AEP (Distinguished) It’s over! One of the highest-profile cases in the history of the estate planning industry, and one that was being monitored by estate planners all over the United States, has been settled. Delaware trust promoters had been holding their breath awaiting the result of the case that became the posterchild for jurisdiction selection and the importance of avoiding the use of a health, education, maintenance and support trust in a jurisdiction like Delaware that allows a divorcing spouse of a beneficiary to penetrate the trust. No estate planning professional can…
Pre-Election Estate Tax Proposals: Clinton vs. Trump
By Martin M. Shenkman, CPA, MBA, PFS, AEP, JD Are major estate tax law changes in the offing? Perhaps, but my Ouija board smoked when I asked the question. So, barring that type of guidance, what assurance can there be? The election hasn’t occurred yet, so there’s certainly no way to know which candidate will win. Party platforms haven’t even been finalized. And, there’s no assurance that the winner’s proposals will be enacted. In spite of the above, practitioners should put all clients involved in active planning on notice of Clinton and Trump’s proposals because they’re so dramatically different. No…
Hurry and Use the Restricted LLC/LP Statutes Before the IRC Section 2704 Regulations are Finalized!
Download Printable Article By Steven J. Oshins Esq., AEP (Distinguished) Estate planners often use family limited liability companies and family limited partnerships to facilitate gifting and installment sales of minority interests or non-voting interests to family members or irrevocable trusts for the benefit of family members. Under Code Section 2704(b) and Treasury Regulations §25.2704-2(a), if an interest in an entity is transferred to or for the benefit of a member of the transferor’s family, any applicable restriction is disregarded in valuing the transferred interest. Treasury Regulations §25.2704-2(b) defines an applicable restriction as a limitation on the ability to liquidate the…
Feeling the Burn: The Importance of the Tax Burn in Estate Tax Planning
Download Printable Article By Steven J. Oshins Esq., AEP (Distinguished) Decades ago, Jane Fonda made the phrase “feel the burn” popular in her highly successful aerobic exercise videotapes. More recently, “feel the Bern” became popular as the de facto slogan during Bernie Sanders’ presidential bid. But in advanced estate tax planning, we feel a different kind of burn called the “tax burn”. Very simply, our client transfers assets to an Intentionally Defective Grantor Trust (“IDGT”) and continues to pay all income taxes on income produced by the transferred assets, including capital gains taxes on sales of those assets. By continuing…
Knowing What You Don’t Know: What an Effective Financial Plan Anticipates
By Jason Oshins, Financial Advisor, MBA Mark Twain said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” More often than not, planning is done as though the world is linear. Financial Advisors and clients make assumptions as though life moves in a straight line and nothing unexpected ever occurs. Then, when the unexpected occurs – and it will – the plan collapses. An effective plan is dynamic, anticipating and addressing what it can, and preventing the unexpected from derailing a desired future existence. Furthermore, it builds in…
Reducing Or Eliminating Capital Gains On The Sale Of Businesses And Real Estate
Download Printable Article By Bruce Givner, Esq. Most people are familiar with the use of a Section 1031 tax-deferred exchange as a way to handle the disposition of real estate. Some people are familiar with the use of a charitable remainder trust as a way to handle the disposition of unmortgaged real estate and stock in a “C” corporation. However, Section 1031 exchanges have undesired time constraints; CRTs are disliked because (i) the taxpayer can’t use the sales proceeds and (ii) nothing is left to go to the children (not necessarily true). The best approach is to talk to clients…
Planning for 2704 Proposed Regs: Be Wary of the Step Transaction Doctrine
Download Printable Article By Martin M. Shenkman, CPA, MBA, PFS, AEP, JD The Ultimate Estate Planner recently ran a series of teleconferences on the 2704 Proposed Regs and received numerous responses from our attorney community. Here’s one we wanted to share with you. Introduction Practitioners are still grappling with the intricacies and complexities of the Proposed 2704 Regulations. But it is vital to start addressing some of the long existing tax doctrines that might undermine planning for the new Regs. Because of the incredible focus on the Regs themselves, little has been written yet on ancillary considerations. Once such potential…
How to Write a Proper Business Letter
Download Printable Article By Kristina Schneider, Executive Assistant Writing a business letter seems somewhat common knowledge or perhaps common sense to most people; however, it’s sometimes shocking to see how many administrative staff members – – even those with a college education – – are completely incapable of writing business letters. In this article, we will walk you through each step on how to properly write a business letter so that you can quickly and easily write correspondence on behalf of or for your boss without too much editing. Company Letterhead The first step to writing business letters is to…