Monday, July 14, 2014

ClintonSenateWhile constant attention is being given to Hillary Clinton’s potential decision to run for the presidency in 2016 and the release of her latest book, Hard Choices, last month, news sources recently reported that she and former President Bill Clinton have taken advantage of several of the estate planning techniques recommended by trusts and estates attorneys for high net worth individuals.

This is interesting, in part, because the Clintons support the estate tax and have not been in support of its repeal.

According to reported sources, each of the Clintons created a qualified personal residence trust and each contributed his or her 50% ownership interest in their Chappaqua, New York house to his or her respective trust. A qualified personal residence trust, commonly called by its acronym QPRT, is an IRS sanctioned estate planning technique.  The creator of the trust places a residence or interest in a residence in the trust, retains the right to live in the trust for a term of years, and after the term the trust asset or the residence passes to a beneficiary.

The Internal Revenue Code has special rules which help calculate the value of the “gift” made by the creator to the QPRT. The gift portion, which could offset some of the $5,340,000 exemption allotted to individuals in 2014 is not the entire value of the residence, but the value of the residence when transferred reduced by the value of the retained use by the creator for the trust term.

By having each of the Clintons create a separate QPRT with only a 50% interest in the residence, the value of such interest may also be eligible for a discount for owning less than a majority interest.

In order for a QPRT to work, the creator of the trust must outlive the trust term.  But for a relatively healthy individual, it is quite likely for this to happen.

(more…)

Wednesday, July 9, 2014

465435421POLST, or Physician Orders for Life-Sustaining Treatment, is an approach to end-of-life care that encourages discussions between patients and their health care providers. The goal of POLST is to enable patients to choose the treatment they want or do not want, and to ensure that those preferences are honored. (more…)

Monday, June 9, 2014

451594605In an environment in which states are continuously searching for methods of increasing tax revenues, a major consideration for any settlor, beneficiary or trustee of a trust should be where the trust might be subject to income tax. The days of a trust being taxed in the state where it has its “principal place of administration” are quickly fading, as we enter into a new era in which states are increasing attempting to tax trusts with minimal contacts to the jurisdiction. (more…)

Monday, June 2, 2014

123820206It’s June.  Wedding season is upon us.  It is a good time to think about prenuptial agreements. If you are engaged to be married, should you have a prenuptial agreement? At the minimum, you should at least consider the implications of marriage with or without such an agreement. (more…)

Thursday, May 22, 2014

187458483From BryanCaveFiduciaryLitigation.com

Considering creating a do-it-yourself Will to save money?  A recent Florida Supreme Court Case, Aldrich v. Basile, should make you reconsider.  (more…)

Monday, May 19, 2014

US Supreme Court

In 2012, the Fifth Circuit ruled in In re Chilton that inherited IRAs constituted retirement funds within the “plain meaning” of §522 of the Bankruptcy Code and were thus exempt from the bankruptcy estate, under § 522(d)(12) (the federal exemptions). See our prior discussion of this case here. (more…)

Monday, May 12, 2014

With research and drafting assistance provided by our extern from Washington University School of Law, Rachael Lynch.

Now that we’ve scared you with the potentially high taxes for self-dealing in private foundations, what is self dealing?

Self dealing includes any of the following transactions:

(more…)

Tuesday, May 6, 2014

treasuremapYears ago, my grandparents were robbed.  While going through the house and noting the missing items, my grandmother told my mother she was grateful they did not find the family silverware hidden in the attic staircase.  This was the first time my mother had heard of the hiding place and told my grandmother, “I would have sold this house having never found the silverware.”

Nearly everyone has a hiding place for a few special, tangible items, and increasingly many individuals have assets that are not easy to identify or locate.  After the death of the owner of such assets, it can be very difficult for the personal representative of the estate to locate and take possession of all of the decedent’s assets. (more…)

Wednesday, April 2, 2014

Originally posted on bryancavefiduciarylitigation.com

It is uncommon to see modern trusts that require distribution of all income but preclude distribution of any principal to a beneficiary. Since the characterization of income and principal can be subject to multiple interpretations, precluding any distribution of principal often can lead to legal disputes. In Favour v. Favour (not for publication), the Arizona Court of Appeals disagreed with an Arizona superior court’s ruling that “the income beneficiary of [a] Martial Trust is entitled only to the annual ‘distributable net income (“DNI”)… reported on the federal income tax return, and no more than that.” The Will also specified that it was intended to qualify as “qualified terminable interest property” (“QTIP”) for which an election could be made under Section 2056(b)(7). (more…)

Wednesday, March 26, 2014

474603253It’s that time of the year again…tax time! Like it or not, when tax season rolls around it is time for most Americans to add “do taxes” to the “to do” list. Chances are you have already started gathering the documents that you or your accountant will need to complete your income tax return. Or, if you are ahead of the game, your income tax return is already filed and your refund (if you are lucky) is in your pocket. (more…)