By Philip J. Kavesh, J.D., LL.M. (Taxation), CFP®, ChFC, California State Bar Certified Specialist in Estate Planning, Trust & Probate Law Over the past 15 years or so, I’ve seen a big shift in the new client market. It used to be that a large percentage of the people coming to our office had no Living Trust or other estate plan. Today, the market has almost completely flipped, with many if not most people coming in with an existing trust or plan. Why has this market shift occurred? Like it or not, the truth I’ve witnessed (and you likely will…
Kick-Start Your Boss’ Calendar in the Right Direction for 2022
By Kristina Schneider, Practice Success Coach It’s hard to believe that we are already heading into the final months of 2021. As the former Executive Assistant to busy attorney, Philip Kavesh, what this time of year typically meant for me is that I would be typically preparing Phil’s calendar for the next year so that we can maximize the best use of his time, while also making sure that I don’t overlook important items that need to get onto his calendar. Here are some tips for laying out the 2022 calendar for your boss (whether he or she is an…
Is 2021 the Greatest Year Ever for Estate Planners?
By Steven J. Oshins, Esq., AEP (Distinguished) History repeats itself. First, there was the fiscal cliff in 2012. Then there was the “threat” of a Biden presidency and an upcoming tax act in 2020. Now we are living through the “threat” of an upcoming tax act as we near the end of 2021. Each of these three years has something in common — a supply/demand ratio that made it impossible for many potential clients to be able to find a capable estate planning attorney to take on their work and be able to complete it by year-end. YEAR 2012 In…
Why Not To Use Incentive Clauses in Trusts
By Steven J. Oshins, Esq., AEP (Distinguished) Many attorneys draft incentive clauses into trusts. An incentive clause generally makes additional distributions to the beneficiary upon reaching certain milestones. Probably the most popular incentive clause is one which makes mandatory distributions based on matching the beneficiary’s salary. That sounds great until you actually think through a real-life example and the disastrous results. A REAL-LIFE EXAMPLE Assume that Client has three young children. Child A grows up to be a top surgeon earning $3 million per year. Child B becomes a stay-at-home parent to three wonderful children and is one of the…
The Irrevocable Life Insurance Trust
By Steven J. Oshins, Esq., AEP (Distinguished) An Irrevocable Life Insurance Trust (“ILIT”) is a trust that owns one or more life insurance policies and is designed to avoid estate taxes on the death benefit. The trust must be irrevocable in order to accomplish this. The general plan is to create the trust prior to the purchase of the life insurance and have the trustee of the ILIT purchase the insurance and elect to have the ILIT named as both the owner and the beneficiary of the policy. However, in the event that the life insurance policy is owned outside…
The Floating Spouse Provision and More: Designing a Spousal Lifetime Access Trust for Maximum Access and Maximum Divorce Protection
By Steven J. Oshins, Esq., AEP (Distinguished) A Spousal Lifetime Access Trust (“SLAT”) is an irrevocable trust for the benefit of the settlor’s spouse and descendants. The settlor makes transfers to the trust that must come from the settlor’s separate property. If drafted properly, the trust assets are protected from the creditors and divorcing spouses of the settlor and of the beneficiaries and aren’t subject to estate taxes (if using a completed gift version) when the settlor and settlor’s spouse pass away. THE KEY IS IN THE DRAFTING A general fear that many clients and advisors have is that they…
Top 10 E-mail Etiquette Rules for Estate Planning Professionals (and Their Assistants and Staff)
By Kristina Schneider, Practice Success Coach Electronic mail (otherwise known as e-mail) plays an important part in any business these days. It’s helped make communicating and doing business far more efficient and simpler. However, as with most things in business, there are certain rules that professionals should follow when it comes to using e-mail. If not done correctly, it can actually create unnecessary confusion, chaos, and an unnecessary amount of miscommunication (and maybe even legal liability!). Below, you will find what I consider to be the ten most important e-mail etiquette rules to live and work by. (NOTE: These are…
Poll Results: The New First-Tier Trust Jurisdictions
By Steven J. Oshins, Esq., AEP (Distinguished) In May of 2021, I conducted a LinkedIn poll asking, “[w]hich of the following are the first-tier trust jurisdictions?” The choices were (a) AK, DE, NV and SD, (b) NV and SD or (c) NV, SD and TN. The purpose of the poll was to see if the general public still believes that Alaska, Delaware, Nevada and South Dakota make up the first tier. Or have Nevada and South Dakota distanced themselves enough from Alaska and Delaware to deserve their own tier? Or has Tennessee improved enough to join Nevada and South Dakota…
NING Trusts for California Residents: “Rumors of My Death Have Been Greatly Exaggerated”
By Steven J. Oshins, Esq., AEP (Distinguished) Late last year, the California Franchise Tax Board announced that it was planning to bring legislation to abolish the use of Incomplete Gift Non-Grantor Trusts, otherwise known as “ING Trusts”. The two states where most of these trusts are established are Nevada (“NING Trusts”) and Delaware (“DING Trusts”). However, since these trusts are non-grantor Domestic Asset Protection Trusts, this article will assume that the draftsman would select Nevada which is generally considered the number one asset protection trust jurisdiction. The legislation was to be effective for any taxable income earned on or after…
Saving State Income Taxes: NING Trusts and Completed Gift Non-Grantor Options
By Steven J. Oshins, Esq., AEP (Distinguished) Prior to the Trump Tax Act, state income taxes paid were deductible against federal income tax. However, the Trump Tax Act limits the amount of the federal income tax deduction for state income taxes paid, real property taxes paid and sales taxes paid to a cumulative (yes, cumulative!) total of $10,000 per year. The $10,000 is used up for property taxes only for many of our clients. Therefore, state income taxes paid are essentially no longer deductible! This is why state income tax avoidance planning has arguably become the hottest area of estate…