Monday, November 24, 2014

451428613Advances in medical technology have made it possible for a child to be conceived after the death of one or both of his or her genetic parents with the use of stored sperm or ova. Recently, the New York State Legislature has sent a bill to Governor Coumo which clarifies when a child born after the death of his or her genetic parents, a so called posthumously conceived child, will be deemed a child of such parents for the purpose of inheritance and intestacy law. This issue may arise when a genetic parent who will ultimately have a posthumously conceived child dies without a Will or with a Will using the generic term child or issue. Does the posthumously conceived child take a share of his or her genetic parent’s estate? (more…)

Tuesday, November 4, 2014

180197523There is much confusion about what a trust protector can and cannot do with respect to a trust for which the trust protector is serving. First and foremost, the trust protector’s powers provided by state statute are often limited to the powers authorized in the trust instrument, as reflected by the Court in Schwartz v. Wellin, 2014 WL 1572767 (D.S.C., April 17, 2014).

Keith Wellin created the Wellin Family 2009 Irrevocable Trust (“Trust”), a dynasty trust for the benefit of his three children and their respective lineal descendants, with his children and the South Dakota Trust Company as the Trustees. After creating this Trust, Milton sold his interest in the Friendship Partners LP (“FLP”) to the Trust, taking back a promissory note for $50 Million. Apparently in 2013, a dispute arose between Keith and his children, when his daughter, Cynthia, as manager of the LLC that was the general partner of the FLP, proposed to sell all of the assets of the FLP, liquidate the FLP, set aside $50 Million to pay the promissory note and distribute the remaining $95 Million to the three children.

In order to prevent such actions, Keith appointed Schwartz as the Trust Protector. The same day, Schwartz amended the Trust to give the trust protector “the power to represent the Trust with respect to any litigation brought by or against the Trust if any Trustee is a party to such litigation”, and “to prosecute or defend such litigation for the protection of trust assets” (“Litigation Provision”). Schwartz also immediately removed the corporate trustee, and the individual Trustees completed the sales and distributions as proposed. The individual Trustees believed their actions were justified to avoid a $40 Million tax liability that would be incurred when Keith turned off the Trust’s grantor trust status. (more…)

Friday, October 10, 2014

samesexmarriageIn light of all of the changes in same-sex marriage laws happening over the past couple of weeks, 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!

Get estate documents reviewed/updated to take advantage of spousal tax reduction opportunities

Double-check beneficiary designations for retirement plans

Remember–spouses have to consent on some retirement plans to someone else being named as beneficiary!

Review any marital or co-habitation agreements regarding income tax benefits affecting property rights

Thursday, October 9, 2014

guysheartsIn light of all of the changes in same-sex marriage laws happening over the past couple of weeks, 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.

Plan, plan, plan:

  • Will/Living Trust
  • Healthcare Directives
  • Pre-nuptial Agreement
  • Beneficiary Designations
  • Asset re-titling

Consider income tax consequences

Consider whether various federal agencies will honor marriage based on residence state

Consider state of residence laws regarding other family issues such as adoption and divorce

Consider ceremony jurisdiction (California, Delaware, DC, Hawaii, Minnesota and Vermont are favored because of favorable divorce laws)

  • These states will issue divorces for couples married in the state even if they don’t reside there at the time of the divorce, which could be important if your state of residence doesn’t recognize same-sex marriage and, therefore, may not issue you a divorce
Tuesday, September 9, 2014

statuteofliberty  Update: New York State’s Department of Taxation and Finance recently released a summary of the changes made to New York’s estate tax law earlier this year which were previously reported on this blog.  As reported before these changes were rather significant and are worth repeating. (more…)

Monday, September 8, 2014

Originally Posted on BryanCaveCharityLaw.com.

Wednesday, Oct. 29, 2014, from 9 a.m. to 5 p.m. in 202 J.C. Penney Conference Center at UMSL.

Starting a 501(c)(3) nonprofit organization and governing a 501(c)(3) nonprofit organization are flip sides of the same coin. Instructor Dan Sise knows that the steps you take in forming a 501(c)(3) nonprofit corporation affect how your organization must operate in the future. And the steps you take in the governance and operation of your 501(c)(3) nonprofit corporation affect your ability to maintain your 501(c)(3) tax-exempt status with the IRS on an ongoing basis.

Come to this class to learn how to start a Missouri nonprofit corporation that will seek to obtain 501(c)(3) tax exempt status from the IRS. In addition, this class will also cover good governance policies, strategies, and requirements that will allow your organization to maintain its 501(c)(3) tax exempt status on an ongoing basis once you are up and running.

This is an intensive 8 hour class that will focus on practical information and resources like forms to use, web sites to access, governmental offices to contact or be aware of, and a checklist of steps to take. The fee for this class includes lunch.

To register, see here.

Monday, June 23, 2014

176961933Another recent court decision has looked at the constitutionality of the State imposing state income tax on an irrevocable trust. Last year, the Court in McNeil v. Commonwealth of Pennsylvania held that Pennsylvania’s attempt to tax the McNeil trusts, whose connection to Pennsylvania was (1) the residency of the settlor at the time the trust was created and (2) the residency of the trust’s discretionary beneficiaries was an unconstitutional violation of the Commerce Clause of the United States Constitution. (more…)

Monday, June 16, 2014

453118507Last week, we discussed the important issue that settlors, beneficiaries, and trustees of a trust should be thinking about—Do You Know Which States Are Trying to Tax Your Trust?  Two states’ courts have recently looked at what constitutes sufficient minimum contacts to subject a trust to the State’s income tax laws.  In this blog, we will discuss Illinois’ decision in Linn v. Dep’t of Revenue.  Come back next week for our discussion of Pennsylvania’s decision in McNeil v. Commonwealth of Pennsylvania. (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…)

Wednesday, April 16, 2014

The New York Budget bill made changes not only in the estate tax arena, as previously reported on this blog, but also to the income taxation of certain trusts.

Under law prior to the passage of the Budget bill, a resident trust created by a New Yorker was entirely exempt from New York income tax if there was (i) no New York resident trustee, (ii) no assets located in New York and (iii) no New York source income. The new law, effective for calendar years beginning January 1, 2014, provides that a New York resident beneficiary receiving a distribution of income from a New York State resident trust which is exempt from New York State income tax, will be taxed on that “accumulated distribution”. The new accumulation distribution tax, will not apply if the accumulated income was earned before 2014 or if the trust itself is subject to New York State income tax or for periods before the beneficiary become a New York resident. This is also not applicable to grantor trusts, where the income of the trust is taxed to the grantor, rather than the trust or its beneficiaries. (more…)