Wednesday, November 11, 2015



Open up any newspaper or magazine across the county and likely you will read an article about the difficulties facing young adult looking for their first jobs.  More and more young adults are turning to their parents for financial assistance. How can parents help their children? And what are the gift tax implications of such assistance?

Each individual has the ability to gift $14,000 a year to each person without using up any of his or her lifetime exclusion. A married couple can then gift $28,000 to an adult child without any gift tax impact at all. However, you must keep in mind that this $14,000 amount is inclusive of all gifts. You cannot give $14,000 directly to your child and then give them additional withdrawal rights under a trust. (more…)

Thursday, November 5, 2015



With some minor exceptions, the facts are the same in PLR 201525002& PLR 201525003. In these PLRs, the Grantor transferred funds to an irrevocable trust for the Grantor’s own benefit and the benefit of several charities. In each case, the trust was created in a state other than the state of residence of the Grantor. In addition to the Trustee, each trust had an Investment Advisor, a Distribution Advisor, a Charity Distribution Advisor and a Trust Protector, none of whom were trust beneficiaries, except that the Charity Distribution Advisor was the Grantor’s spouse who was a potential appointee.

The Distribution Advisor had the power to direct the Trustee as to whether to make Quarterly Distributions, Support Distributions and Special Contingent Distributions to the Grantor, and also had the power to direct the Trustee as to whether to make Quarterly Distributions to the charities.

The Grantor had a limited testamentary power to appoint the trust among her spouse and charities.

The Investment Advisor had the power to direct the Trustee as to trust investments. (more…)

Tuesday, October 27, 2015


In Lubin v. AT&T Ret. Sav. Plan (2015 WL 4397703), an adoption was not given effect in determining who would receive the life insurance benefits at issue.

In this case, Austin Hardy participated in a Retirement Savings Plan (“Plan”), which included a life insurance benefit. At his death, he was survived by his sisters, Pauline Lubin and Frances Koryn (Plaintiffs), and his biological daughter, Jennifer Krokey. Although Krokey was Hardy’s biological child, she had been subsequently adopted by a step-father. Under Florida law, a child who is adopted is the child of the adopting parent and ceases to be a child of the biological parent for all purposes. (more…)

Friday, October 23, 2015


In a recent bankruptcy case, Richard Lewiston unsuccessfully attempted to shelter his assets in the Lois and Richard Lewiston Living Trust (the “Trust”) from inclusion in his bankruptcy estate based on the Trust’s spendthrift provision. Here, the bankruptcy court looked to Michigan state law in applying the provisions of the Bankruptcy Code and concluded the Trust property was part of Lewiston’s bankruptcy estate. (more…)

Monday, August 31, 2015


Last month, the UK government announced sweeping changes to the taxation of “resident non doms,” a classification of individuals who receive favorable tax treatment from the UK government.

The UK tax obligations of an individual depend in large part on the individual’s “domicile” under generally applicable English common law principles. (Unlike the US tax system, the citizenship of an individual is irrelevant under the UK tax system.) The UK income tax and capital gains tax systems (which operate as two separate regimes of tax) take into account the “residence” status of an individual, as well. The residence rules were massively overhauled with effect from 6th April 2013. Note that a UK tax year runs from April 6 to April 5 of the following years.

Because of quirks in the English common law approach to determining domicile, in extreme cases it is possible for several generations of a family whose patriarch was domiciled at birth outside of the United Kingdom to live in the United Kingdom without becoming UK domiciled. As a result, these “non-doms” enjoy certain UK income and capital gains tax advantages, which various political parties in the United Kingdom have threatened for years to restrict or eliminate altogether. (more…)

Friday, July 10, 2015

ThinkstockPhotos-176603977The IRS issued final regulations for electing portability and use of a deceased spousal unused exclusion amount (DSUE) on June 12, 2015. Though the final regulations are fairly technical, they are worth understanding as applying them correctly can mean a $5,430,000 difference in the amount that passes through an estate tax free. The final regulations adopt the temporary regulations that were issued in 2012, with several changes and clarifications:

1. Upon request, the proposed regulations allowed for an extension of time to elect portability for those estates that did not meet the requirements for an automatic extension. It was unclear whether estates that exceed the basic exclusion amount (currently $5,430,000 indexed for inflation) could request such an extension because the filing deadline for such estates is prescribed by statute and thus cannot be modified by regulation. The final regulations clarify that (more…)

Wednesday, July 8, 2015

samesexmarriageIn light of the recent Supreme Court decision in Obergefell v. Hodges, we are re-posting this blog, which was originally posted on October 10, 2014.

We thought we’d share some of the information presented by our attorneys at the CLE presentation in our St. Louis office on Wednesday morning, “Same Sex, Different Day:  Estate Planning for Same Sex Married Couples (Post Windsor decision), co-sponsored by the Bryan Cave LGBT Affinity Group.  Presenters were Kimberly Civins, Stephen Daiker, and Douglas Stanley, along with Tony Rothert from the ACLU of Eastern Missouri.

Get income tax advice regarding amending returns and filing returns going forward

The sooner the better, as there is a 3 year statute of limitations for amending returns if filing as married achieves a better tax result! (more…)

Friday, June 26, 2015


In a landmark opinion, the Supreme Court rules today that states cannot ban same-sex marriage. The majority opinion in the 5-4 decision was written by Justice Anthony Kennedy.  Today’s ruling overturned a decision from the Sixth Circuit Court of Appeals in Cincinnati, which said states had legitimate reasons for maintaining the traditional definition of marriage.

“No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were,” Kennedy wrote. “As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death.” (more…)

Thursday, June 4, 2015

The trailers for the newest installment in the Mission: Impossible franchise, Mission: Impossible Rogue Nation, are being released and, as always when we see actors performing daredevil stunts, it makes us think about life insurance.  Hazard (I use the term loosely, in light of what these guys do) of the job, I guess.  So, once again, we thought we’d remind everyone about the use of life insurance trusts to reduce estate tax by re-posting the blog we wrote in after seeing his stunts for Ghost Protocol.

And, for your viewing pleasure, share another video of Mr. Cruise’s stunts.  (I’m starting to think Tom Cruise or Mission: Impossible should start sponsoring our blog!)

It’s true, it is possible to transfer life insurance proceeds to your beneficiaries without having to pay estate tax on those proceeds.  An insured can create an irrevocable trust that is designed to be the owner and beneficiary of a life insurance policy on the insured’s life.  The only amount that the insured would end up paying transfer tax on (or allocating unified credit to) would be the amount the insured transfers to the insurance trust to pay the premiums on the policy.  If the amount contributed to the trust does not exceed the annual exclusion amount allowable to each of the beneficiaries of the trust, and if the trust is designed to give the beneficiaries crummey withdrawal rights (the right to withdraw any such contributions to the trust over the period of 30-45 days after the transfer), the insured/grantor would not have to use any of his or her unified credit or pay any gift tax on these transfers, either. (more…)

Tuesday, April 21, 2015


This article describes what to do to protect the bank, your family and your investment.   Originally published on

For a number of community banks, the management and ownership of the institution is truly a family affair. For banks that are primarily controlled by a single investor or family, these concentrated ownership structures can also bring about significant bank regulatory issues upon a transfer of shares to the next generation.

Unfortunately, these regulatory issues do not just apply to families or individuals that own more than 50 percent of a financial institution or its parent holding company. Due to certain presumptions under the Bank Holding Company Act and the Change in Bank Control Act, estate plans relating to the ownership of as little as 5 percent of the voting stock of a financial institution may be subject to regulatory scrutiny under certain circumstances. Under these statutes, “control” of a financial institution is deemed to occur if an individual or family group owns or votes 25 percent or more of the institution’s outstanding shares. These statutes also provide that a “presumption of control” may arise from the ownership of as little as 5 percent to 10 percent of the outstanding shares of a financial institution, which could also give rise to regulatory filings and approvals. (more…)