SIXTY FEET
It never ceases to surprise me how often I find noteworthy philanthropic endeavors from people that I would least expect. The best part of my job sometimes is simply listening to my clients’ passionate interests in sustaining diverse charitable causes within their community and then passing these interests onto other clients. It thus came as a surprise to me when I learned about a unique charitable endeavor in Uganda (not exactly a country on my radar screen) called SIXTY FEET* (www.sixtyfeet.org) while travelling on an extended business trip in Europe with of all people one of my Atlanta-based partners at… Read more
Going, Going, Gone?
If I were a betting man, I would have lost this bet a long time ago. After all, just who would have wagered any money that President Barack Obama would have agreed to one of the most far reaching and affluent friendly pieces of estate and gift tax legislation of the past decade? It just goes to show that trying to predict what our politicians are going to do is an impossible task. With that said, our clients are in a unique period of unparalleled opportunity to transfer wealth to their descendants. The new law known as The Tax Relief,… Read more
The Atkins’ Method of Trimming Trustee Fat
The removal of a trustee from a trust can be a difficult and time consuming process for both beneficiaries and trustees alike. Courts are generally loathe to interfere with a trust creator’s choice of trustees. However, most states provide trust beneficiaries a judicial mechanism to remove a trustee when the relationship between beneficiaries and trustees has become intractable or the trustees have abused their authority to benefit themselves over the named beneficiaries. A recent removal proceeding in New York Surrogate’s Court illustrates a typical example of a trustee/beneficiary relationship degenerating to the point where removal was granted. Under Section 711… Read more
Now What?: Thoughts on Gift and Estate Planning After 2010
The sweeping changes to the gift and estate tax laws resulting from the Tax Relief, Unemployment Insurance Authorization and Job Creation Act of 2010 (the “Act”) create some new opportunities and new considerations for gift and estate tax planning. Clients are asking “What do I do now?” Discussed below are some thoughts about estate and gift planning after 2010. Lifetime Use of Gift Tax Exemption The Act increased the estate tax exemption, the gift tax exemption and the generation-skipping transfer (“GST”) tax exemption to $5 million. As a result, clients can now make lifetime gifts of up to $5 million… Read more
Exculpatory Clauses, Or The Few Words That Could Make A Big Difference
Even the most prudent and trustworthy of trustees may find themselves a defendant in a lawsuit brought by a beneficiary who is disappointed or disgruntled or both. The volatility of the markets and the natural human instinct to second-guess and ascribe blame when bad things happen can combine to produce such lawsuits. If that occurs, the presence or absence of an exculpatory clause in the trust may end up determining the outcome of the case. An exculpatory clause is a provision in a will or a trust that limits the liability of the trustee/fiduciary in a specific way. An exculpatory… Read more
Timing is Everything: A Lesson in Asset Protection Planning
Asset protection is very popular in the estate planning arena right now, hardly surprising given the current state of our economy. Asset protection is a form of wealth protection planning, designed to protect one’s assets from future creditors and financial disaster. Asset protection techniques run the gamut from the relatively simple (such as transfers to a spouse) to the much more complicated (such as domestic or off-shore asset protection trusts). Regardless of the strategy employed, however, when engaging in asset protection planning, it is critical to keep in mind one of its primary tenets: timing is everything. A recent case… Read more
U.S. Estate and Gift Planning for Non-Citizens
It goes without saying that the laws governing the U.S. estate and gift tax system are complex and the taxes and penalties for mistakes are high. For a non-U.S. citizen (“non-citizen”) the U.S. estate and gift tax system is even more onerous and requires a much higher degree of awareness. Of course the good news for U.S. citizens and non-citizen residents is that the applicable exemption is now $5 million. However, for a nonresident non-citizen (“nonresident alien” or “NRA”) the applicable exemption continues to be limited to $60,000. Thus, estate tax is due when a nonresident alien’s estate transfers U.S…. Read more
Heading for the Hills
Recently, U.S. taxpayers have displayed increased anxiety relating to a number of issues, not the least of which is the growing uncertainty concerning U.S. income and estate taxes. President Obama’s recent holiday gift to affluent families (through The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act) will indeed make it both easier and less expensive for clients to transfer wealth to their descendants. The new law severely diminishes estate and gift taxes for the vast majority of U.S. citizens by way of higher exemptions. However, this law as it relates to estate and gift taxes remains in effect only… Read more
Fiduciaries Beware! Life Insurance Trusts and The Florida Prudent Investor Rule
As pointed out in other columns in this newsletter, President Obama’s holiday gift to affluent families in the form of new tax legislation known as The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, significantly expanded the number of families who will escape the grasp of the federal estate tax system. Married couples who have not made any prior taxable gifts can now pass the first $10,000,000 of their wealth tax free to their children without incurring a federal estate tax. For tax years before 2010, many Florida residents used life insurance trusts to help pay the… Read more
Florida’s Answer to Deathbed Marriage
Florida law now empowers family members to challenge deathbed marriages. Previously this type of marriage resulted in the decedent’s property going to the recently married surviving spouse rather than to the decedent’s lineal descendants and other family members. Prior to this change, a deathbed marriage was the ultimate weapon for those individuals looking to prey on the accumulated wealth of an elderly single person moving to, or living, in Florida. A marriage prior to a decedent’s death allowed the surviving spouse to enjoy many property rights of the decedent such as the right to live in the family home for… Read more
TRENDS IN PHILANTHROPY
A recent study* about the trends in charitable giving for the year 2009 sheds some important light on how the past two years of economic turmoil has affected philanthropic giving by affluent families. It should come as no surprise that charitable giving declined in the year(s) studied. According to the Study, an analysis of charitable deduction records for those who itemized their charitable giving indicated that the average amount deducted for charity decreased by 9.9% for the years 2007 to 2008. In 2009 average charitable giving dropped a whopping 34.9%! As is often said, few families were spared the economic… Read more