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…

The 2022 Biden Estate Tax Cliff: Preparing After the 1/1/2013 and 1/1/2021 Cliffs

By Steven J. Oshins, Esq., AEP (Distinguished) If you are an estate planner, you likely had your best revenue ever in 2012.  Then you likely annihilated your previous revenue record in 2020.  This happened because of the so-called “fear of missing out” with different tax “cliffs” expected to occur at the end of those two years, thereby causing a commotion among the wealthy. JANUARY 1, 2013 FISCAL CLIFF Rewind back to the year 2012.  President Obama was in office and the $5 million estate and gift tax exemption was scheduled to expire and roll back to only $1 million at…

9th Annual Dynasty Trust State Rankings Chart Released

By  Steven J. Oshins, Esq., AEP (Distinguished) The 9th Annual Dynasty Trust State Rankings Chart has been released! This year’s Chart factors in the new era of Dynasty Trusts. The Chart is an easy-to-use summary of leading Dynasty Trust states that shows the material differences among the states and ranks them according to usability and flexibility. Planners often focus on the multi-generational estate tax benefits of a Dynasty Trust. However, the Tax Cuts and Jobs Act of 2017 essentially doubled the federal estate and gift tax exemption which, after inflationary increases, is now $11.58 million per person, or $23.16 million…

The Biden Estate Tax Cliff: Gifting Like it’s 2012 All Over Again!

By  Steven J. Oshins, Esq., AEP (Distinguished) Those estate planning attorneys who were in practice in 2012 surely remember the last few months of the year when prospective clients were calling and emailing all day long every day literally begging us to take “just one more client”! There was a mad rush to make $5 million gifts before the estate tax exemption was going to drop back down when the clock struck midnight at the end of 12/31/2012. Most of the experienced attorneys were so busy that they stopped taking new clients in October or November. FAST FORWARD TO 2020…

6th Annual Non-Grantor Trust State Income Tax Chart Released!

By  Steven J. Oshins, Esq., AEP (Distinguished) Different states have different rules as to what creates a “resident trust” that is subject to taxation in that state.  States may tax a trust based on the residency of the settlor or testator, based on whether there is a resident trustee or beneficiary or whether there is administration in that state, or for a combination of these factors and/or other similar factors. So it isn’t as easy as simply situsing a trust in a state with no state income tax.  You have to look at the state taxing statutes that may apply….

The SECURE Act: Everything You Need to Know (and How to Advise Your Clients!)

On December 20, 2019, President Trump signed a spending bill which had attached to it a piece of legislation that much of the estate, tax and financial world has been anxiously awaiting for an update on called the “Setting Every Community Up for Retirement Enhancement Act of 2019” (or “SECURE Act”). The SECURE Act went into effect January 1st, 2020 and is set to dramatically impact retirement planning for you and your clients! As many are aware, the most important provision of the SECURE Act to impact our clients and the planning we do for them includes the elimination of…

Top Six Opportunities to Use a Corporate Trustee

By Steven J. Oshins, Esq., AEP (Distinguished) Corporate Trustee A corporate trustee is generally either a bank trust department or a trust company.  The employees at these companies have been trained to know how to administer trusts, how to account for their actions and to deal with beneficiaries.  They are licensed and bonded and therefore there is often recourse if something goes wrong. The Argument for Corporate Trustees Individuals will often neglect to take care of their responsibilities such as paying bills on time or following the rules required by the language in their trust agreements.  Individuals also sometimes steal. …

The 2010-2019 All-Decade Estate Planning Awards

By Steven J. Oshins, Esq., AEP (Distinguished) This past decade has arguably seen more changes in the estate planning industry than ever before. This article will highlight many of these changes by handing out awards in a number of different categories. #1. MOST SUBSTANTIAL CHANGE IN THE LAW AWARD WINNER: SUBSTANTIAL INCREASE IN ESTATE TAX EXEMPTION. The change in the law that has been the most significant was the substantial increase in the federal estate tax exemption. No other change in the law played such a prominent role in the way estate planners plan since this essentially turned estate tax planners…

Grantor Retained Annuity Trusts for the Large Estate

By Steven J. Oshins, Esq., AEP (Distinguished) The federal estate and gift tax exemption is at an all-time high, thereby leaving only a tiny percentage of people who have taxable estates.  This shift in demand for advanced estate tax planning has similarly reduced the number of estate planners who handle advanced estate tax planning, an expected result of supply and demand.  Even if an estate planner doesn’t personally practice in the high-net-worth area, the planner absolutely must be aware of certain estate tax-saving techniques such as the Grantor Retained Annuity Trust (“GRAT”). A GRAT is an irrevocable trust into which…

CHECKLIST: 2017 Tax Act & Recent Developments

By Martin M. Shenkman, CPA, MBA, PFS, AEP (Distinguished), J.D. Summary: The 2017 Tax Cut and Jobs Act has changed almost every aspect of planning.  Consider the following. √ Sec. 199A: The 20% QBI deduction applies for 2018 – 2025. Consider the sunset of this tax bennie when evaluating the cost of planning to enhance whatever benefits you can get. Example: Before restructuring a business, will the payback over the years remaining be worth the cost? √ Charity: The new doubled standard deduction may eliminate any tax benefit from donations. Consider setting up a non-grantor trust to salvage that deduction. Example: You create an irrevocable…