Advise Clients to “Shift” Opportunities Rather than Grab It Themselves

By Jeremy Spackman, Esq. Opportunity Shifting is a technique where a client’s parent, grandparent or other person sets up a beneficiary controlled Dynasty Trust for the benefit of the client and the client’s descendants.  The client, as trustee of the Dynasty Trust, uses the gift made by the parent or grandparent to invest in a hot business or investment opportunity inside the Dynasty Trust, thereby protecting the opportunity from estate taxes, creditors and divorcing spouses for the duration of the trust. BENEFICIARY CONTROLLED DYNASTY TRUST Before explaining the steps involved in an opportunity shifting transaction, it is important to understand a beneficiary…

“Contextualizing” Life Insurance

By Jason Oshins, Financial Advisor, MBA Context is everything, and an important component of a financial advisor’s job is to contextualize the decision-making process to enable clients to make more effective decisions with a greater likelihood of long-term success. When planning for a couple’s retirement, I frequently begin by reviewing a life expectancy chart, emphasizing two components: (1) the potential gap between the first and second deaths and (2) the potential length of time before the second death is likely to occur. Assuming a healthy 40-something couple, the gap can be 10, 15, or 20 years, if not more, and…

“Green Book” Proposals and Income Tax Planning

By Robert S. Keebler, CPA, MST, AEP (Distinguished) On April 13, the Treasury Department issued its annual Revenue Raising Proposals, commonly referred to as the“Green Book”. In this column we will summarize the key income tax proposals and suggest some planning ideas. These proposals include: (1)  Implementing the Buffett Rule by imposing a new “Fair Share Tax;” (2)  Reducing the value of certain income tax deductions and exclusions; (3)  Limiting the total amount a taxpayer can accrue in tax favored retirement plans; (4)  Shortening the deferral period for inherited IRAs; and (5)  Taxing carried interests as ordinary income. INCOME TAX…

Fight Back Against “Commoditization” and Low-Priced Competition

Download Printable Article By Philip J. Kavesh, J.D., LL.M. (Taxation), CFP®, ChFC, California State Bar Certified Specialist in Estate Planning, Trust & Probate Law (UPDATED JULY 2015) The estate planning profession, and in particular the basic Living Trust-centered practice, has been hammered by new challenges.  There’s the proliferation of Internet “zoom” document providers and do-it-yourself trust kits (Suze Orman and the like).  There are non-attorney trust mills increasingly grabbing market share (often in violation of the state statutes prohibiting the unauthorized practice of law).  And there are bargain-priced, low-end attorneys (many of whom have jumped aboard the Living Trust craze…

The Real Deal with IRAs and Lawsuit Protection

Reproduced with permission from Jeffrey M. Verdon Law Group, LLP. There are very few assets we own that are more sacred than our retirement plans. Under general legal principles and public policy, most jurisdictions exempt retirement accounts, such as 401Ks and IRAs, from creditors. However, in a recent court case, the so-called “inherited IRA,” was held not to have such “firewall” creditor protection. An inherited IRA is nothing more than an IRA that is passed from the owner of an IRA at his or her death to the designated beneficiary. In general, sound public policy supports the stance that because…

Superstar Estates: Fleeting Fame, Enduring Security by Robert L. Moshman, Esq.

Reproduced with the expressed written consent and permission from Robert L. Moshman, Esq., author of the The Estate Analyst. To contact Bob Moshman to be included on his distribution list of his monthly newsletter, e-mail Bob at bmoshman@optonline.net. Actors, musicians, athletes, and Kardashians can become famous overnight, but notoriety doesn’t automatically mean financial security; sadly, it usually ends up meaning the opposite. Lottery winners and other windfall recipients often follow a similar path, even if their “stardom” is limited to local friends, neighbors, and family. Celebrity wealth can evaporate along with fleeting fame. Celebrities also attract lawsuits, moochers, and scam…

Tax Planning for 2013 Under the New Laws

By Robert S. Keebler, CPA, MST, AEP (Distinguished) As you probably know all too well, tax rates increase substantially in 2013 and later years for high income taxpayers. Not only did the top income tax rate increase from 35% to 39.6%, but a 3.8% Medicare surtax is now imposed on net investment income (NII). The 39.6% rate now applies to taxable income over $450,000 for married taxpayers and $400,000 for single taxpayers. In addition, net investment income is subject to a new 3.8% Medicare surtax to the extent modified adjusted gross income exceeds $250,000 for married taxpayers and $200,000 for…

New Private Letter Ruling Approves NING Trust

By William D. Lipkind, J.D., LL.M. (Taxation) & Steven J. Oshins, J.D., AEP (Distinguished) For many years, practitioners have used the so-called DING Trust to save substantial state income taxes for their clients.  “DING Trust” is short for Delaware Incomplete Gift Non-Grantor Trust.  It’s an irrevocable trust that the settlor sets up for the benefit of himself and other discretionary beneficiaries.  Transfers to the trust are not completed gifts for gift tax purposes, yet the trust itself is the owner of the assets for income tax purposes.  Because the trust pays the income taxes, a settlor who lives in a…

Insurance as the Key Ingredient of the “New” Estate Planning

Summary of a Live Presentation by Martin M. Shenkman, J.D., CPA, MBA, PFS®, AEP (Distinguished) Despite the American Taxpayer Relief Act of 2012 (“ATRA”), which has now made the federal estate tax exemption “permanent” at $5.25 million, your high net worth clients should still consider estate tax planning right now.  The gift exemption is still $5 million and there is a good chance this may be reduced in the future.  Plus, the combined estate (or gift) tax rate and generation-skipping transfer tax rate is now 64% (not factoring in “decoupled” states’ estate tax)!  Those clients who may have deferred planning…