President Trump Releases Tax Proposals – Keep Calm & Plan On.

Topics: Estate planning, Tax treatment, Trusts

President Trump’s recently-released outline of his tax reform proposal mirrors his campaign promises, and his proposals can be seen as a starting point in negotiations. Achieving major tax reform is very difficult, which is why it rarely occurs. Once statutory language is drafted, and specific provisions are down on paper, there tends to be pushback…

It’s Déjà Vu- Planning (Again) in the Face of Uncertainty – Estate Freeze Series- Installment Sales to Grantor Trusts.

Topics: Estate planning, Grantor trusts, Trusts

The ISGT transfers appreciating assets to the next generation without capital gains taxes and allows the assets to grow in a grantor trust without reduction for income taxes. As a trade-off, the grantor must relinquish control over the assets sold to the trust while retaining liability for the payment of the trust’s income tax obligations.

It’s Déjà Vu- Planning (Again) in the Face of Uncertainty – Estate Freeze Series- Zeroed-Out GRATs.

Topics: Estate planning, Grantor trusts, Trusts

The zeroed-out GRAT can transfer asset appreciation without gift or estate tax, but only if the grantor survives the term of the GRAT and the assets transferred outperform a federally-set investment hurdle rate known as the “7520 rate.” The approach is particularly suited to today’s planning, since the GRAT’s unique features, including options to backload…

What’s Trending- What Experts from the 2017 Heckerling Institute Had to Say.

Topics: Estate planning, Estate tax, Grantor trusts, Split-dollar, Trusts

The 2017 Heckerling Institute on Estate Planning identified several critical trends for legacy and life insurance planning in this uncertain environment, including (1) the need for flexibility, (2) the appealof estate freezes, like GRATs, installment sales, and preferred partnerships for current planning, (3) the tax considerations for life insurance planning regardless of any estate tax…

Survey Says- Tax Reform & Client Planning – What Advisors Are Seeing & Saying.

Topics: Estate planning, Grantor trusts, Irrevocable trusts, Trusts

While President Trump and the Republican-controlled Congress have promised major tax reform, uncertainty remains as to the final outcome. Despite this, the advisors surveyed indicate that many clients are still moving forward if the planning approaches satisfy their practical needs and provide flexibility.

The Trustee’s Duty to Inform and Report – What to Say and When.

Topics: Estate planning, Regulation, Trusts

Most states impose a fiduciary duty on trustees of irrevocable trusts to inform and report to the beneficiaries regarding the trust accounts and administration. Depending on the trust agreement and the applicable state law, this duty may range from mandating that the trustee notify beneficiaries of a trust’s existence and provide annual reports, to leaving…

Another Planning Option- Combining the Benefits of Life Insurance and the Credit Shelter Trust.

Topics: Estate planning, Trusts

A CST created under an individual’s will or revocable trust upon his or her passing can serve as a substitute irrevocable life insurance trust (“ILIT”) by acquiring life insurance on the surviving spouse. This approach leverages the amount in the CST that passes without estate taxes at the surviving spouse’s passing. With proper funding, the…

Fundamentals of Core Legacy Planning – The Importance of Revocable Living Trusts.

Topics: Estate planning, Trusts

Revocable living trusts (“RLTs”) are often the cornerstone of a core legacy plan. A well-­constructed RLT offers many benefits, including asset management during incapacity, probate avoidance, creditor protection, and legacy transfer planning. RLTs also define how an individual’s assets are to be distributed following his or her death and can be structured in many ways,…

One Size Does Not Fit All- Tailoring an Insurance Trust – A Menu of Options.

Topics: Estate planning, Irrevocable trusts, Trusts

ILITs, when tailored to the needs of the ILIT creator (“grantor”), can offer many benefits, including blended family planning, family financial security, estate liquidity, creditor protection, and centralized wealth management for ILIT beneficiaries. With proper implementation and administration, the ILIT’s assets also should not be included in the grantor’s taxable estate.