The Big Six’s “Unified” Tax Framework: Potential Impact & Look Ahead

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“The so-called “Big Six’s” proposed tax reform framework calls for significant reductions in income and corporate tax rates and a repeal of the estate and generation skipping transfer (GST) tax (but is notably silent on the gift tax).  Regardless of how the details shift as a final legislative package is crafted, life insurance remains an essential component of a comprehensive and well-balanced financial plan.”

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Case Study Series: Turbo-Charged Split-Dollar

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“The customizable nature of private SDAs allows highly-illiquid clients to obtain needed life insurance coverage on a sustainable, long-term basis, even if they have minimal federal gift and GST tax exemptions to pay premiums. For example, a trust-to-trust SDA approach may be used where an existing trust, rather than the grantor, lends premium amounts to the ILIT. This “turbo-charged” approach (1) allows the client to leverage liquidity in an existing plan to provide for needed life insurance coverage without adversely impacting his or her personal liquidity or remaining transfer tax exemptions and (2) keeps both the life insurance death benefits and the value of the SDA receivable out of the grantor’s estate under general estate tax principles.”

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No Good Deed Goes Unpunished – Does the Executor Know He Can be Personally Liable for Unpaid Taxes?

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“In the spirit of the IRS always gets theirs, a continuing trend, executors who pay general creditors or distribute property to beneficiaries before paying federal claims can be personally liable for any unpaid estate taxes.”

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Location, Location, Location: Changing the Situs of an Irrevocable Trust

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“While changing a trust’s situs can be beneficial to both the trust and the trust’s beneficiaries, the process requires careful navigation of, and compliance with, the terms of the trust instrument and the statutes of both the current and proposed places of administration.”

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“Trouble Ahead, Trouble Behind,” and You Know that Notion Never Crossed My Mind: Avoiding 5 Common Mistakes in Life Insurance Planning

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“In a world of increasing commoditization, adding value is key. Advising on product selection and identifying common trouble spots in the development of a life insurance plan can offer advisors significant opportunities to provide value to their clients. Collaborating with other allied advisors early on in the client’s planning also can alleviate many of these problems without creating extensive delays to policy issuance.”

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Private Annuities – Managing the Exhaustion Test

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“Transferring assets to a grantor trust in exchange for a private annuity can transfer a family legacy while providing the individual with a fixed income stream for life to manage lifestyle expenses. In particular, this planning may be considered for an individual who has a shortened life expectancy but is not terminally ill. A private annuity for life approach, however, requires additional planning to avoid the exhaustion test, which requires that the trust have sufficient funds to pay the annuity until the annuitant reaches age 110.”

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Private Trust Companies: The What, Who, How, &Why

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“With the trust departments of many financial institutions disappearing, and those that remain declining to manage trusts with “non-traditional” assets or even life insurance policies, families with complex legacies are looking for fiduciary alternatives that can provide the requisite services for the long haul.”

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

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“With low interest rates and uncertainty persisting, estate freeze techniques, like installment sales to grantor trusts (ISGTs), continue to play a key role in legacy planning.”

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

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“Zero-gift planning techniques, like zeroed-out grantor retained annuity trusts (GRATs), have taken on renewed importance in legacy planning as a way to remove assets from the estate and preserve the federal unified credit for later income tax (basis) planning, if needed.”

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