Another Private Letter Ruling Approves NING Trust

By William D. Lipkind, J.D., LL.M. (Taxation) & Steven J. Oshins, J.D., AEP (Distinguished) | Volume 2, Issue 5 (May 2014) Taxpayers in high income tax jurisdictions with large unrealized capital gains or a regular stream of ordinary income from an investment portfolio have always wanted to find a way to eliminate or minimize their state income tax exposure without giving up the economic benefit of the underlying assets.  On March 8, 2013, the IRS issued PLRs 20131002 through 20131006 approving such a trust under Nevada law.  These landmark Rulings have opened the doors for many practitioners to take advantage…

Top Ten Asset Protection Mistakes Attorneys Make

By Steven J. Oshins Esq., AEP (Distinguished) Asset protection has become one of the hottest areas of practice, especially over the last decade.  Although asset protection planning should be a fixture in every estate planner’s repertoire, there are still many asset protection opportunities that are missed.  This article describes ten asset protection opportunities that are often overlooked. Asset Protection Mistake #1: Not discussing asset protection planning. Nearly every estate planning attorney makes a will and revocable trust discussion a given in every estate planning meeting, yet asset protection is often merely an afterthought.  For many attorneys, unless the client or…

Help Your Clients by Using NING Trusts

For your wealthy clients that are looking to avoid state income taxes, one strategy to consider is to move their money and assets into trusts established in states with lower or even no tax, such as Delaware, Alaska and Nevada. One such strategy is something an Incomplete Non-Grantor Trust, set up in Delaware (also known as a “DING”) and now its Nevada counterpart (“NING”). See Bloomberg article: Wealthy N.Y. Residents Escape Tax With Trusts in Nevada Also, you may be interested in our On-Demand Program with nationally renowned estate and asset protection attorneys, William Lipkind and Steven Oshins. See: “The…

Steve Oshins & Bob Keebler on Berlinger v. Casselberry: Discretionary Trusts Available to Alimony Creditor Steve Leimberg’s Asset Protection Planning Newsletter

Thanks to generosity of Leimberg Information Services, we are pleased to provide to you a recently published article on LISI, where nationally renowned estate and asset protection attorney, Steve Oshins, and CPA, Bob Keebler, report on a new Florida case determining whether an alimony creditor can access distributions from Florida discretionary trusts. “The uniqueness of this case is that writs of garnishment were applied to discretionary trusts. This violates the general rule that discretionary trusts are protected from all classes of creditors and support trusts (which must rely on their spendthrift provision for protection) are protected from all creditors except…

2013 Year-End Tax Planning Ideas (Part 3)

By Robert S. Keebler, CPA, MST, AEP (Distinguished) As we near the end of 2013, year-end tax planning again takes center stage. In the last two newsletters we covered two of the most important year-end planning strategies in detail—loss harvesting and Roth IRA conversions. In this newsletter we summarize a number of other strategies that may produce substantial tax savings. Making Trust Distributions The tax brackets for trusts are much more compressed than the tax brackets for individuals. Trusts begin being taxed at the top rate of 39.6% when income rises above $11,950. By contrast, individuals filing joint returns don’t…

Top Ten Reasons to Decant an Irrevocable Trust

By Steven J. Oshins, J.D., AEP (Distinguished) Trust decanting is the act of distributing assets from one trust to a new trust with different terms.  Just as one can decant wine by pouring it from its original bottle into a new bottle, leaving the unwanted sediment in the original bottle, one can pour the assets from one trust into a new trust, leaving the unwanted terms in the original trust. For many years, practitioners have struggled to find ways to change the terms of an irrevocable trust.  However, through common law and through the decanting statutes that have been enacted…

Year-End Gain Harvesting May Create Impressive Tax Savings, But Be Careful!

By Robert S. Keebler, CPA, MST, AEP (Distinguished) Bracket management has always been an important part of income tax planning. As we noted in our May newsletter, however, the 3.8% Medicare Surtax and higher tax rates make it even more important in 2013. We listed the following strategies that taxpayers can use to avoid the surtax and stay out of the higher tax brackets: (1) Income smoothing CRTs; (2) income shifting CRTs; (3) using NIMCRUTS as a substitute for or supplement to a retirement plan; (4) CLATs; (5) Life Insurance; (6) deferred annuities; (7) installment sales; (8) managing IRA distributions;…

Important Fraudulent Transfer Case: Cutuli v. Smith

According to asset protection attorney, Jay Adkisson, the Cutuli v. Smith case is one that estate planners and those doing asset protection planning need to carefully study and understand, particularly where you get a client that wants you to do asset protection planning and has an existing claim against them. FRAUDULENT TRANSFERS TRIGGERS CRIME/FRAUD EXCEPTION AND $10 MILLION PUNITIVE DAMAGES IN CUTULI By Jay D. Adkisson, Esq. From Forbes.com, reproduced with the expressed written consent and permission from Jay Adkisson. Sometimes the Courts will “throw the book” at a debtor and all those who assist the debtor in hiding assets…

New Tax Haven: Puerto Rico

By Jeffrey M. Verdon, Esq., Travor Moses, Esq. & Fernando Goyco-Covas, Esq. Puerto Rico’s politicians have aimed to spur investment and economic activity in Puerto Rico by changing their tax code.  These series of reforms, including the Individual Investors Act (Act 22-2012 and 138-2012), now mean that Puerto Rico offers the potential for exceptionally advantageous United States and Puerto Rican income tax exemptions which, as long as certain requirements are met within the United States Internal Revenue Code of 1986, as amended (the “IRC”),[i] can provide remarkable income tax relief to a wide universe of US citizens, residents, and even…

Should Your Clients Be Using the “OBIT” Instead of the AB?

By Edwin P. Morrow III, J.D., LL.M.(Tax), CFP®, RFC® For many taxpayers, the traditional trust design for married couples is now obsolete. Traditional AB trust designs risk incurring higher income taxes after the first death, and reduced basis increase at the second death.  New trust designs can not only mitigate against this risk, but create income tax advantages over outright bequests. Some practitioners advocate using a marital deduction trust, even if there is no need for the federal marital deduction, to allow the family to achieve a second step-up in basis with the asset protection and control of a trust….