Category Archives: Tax Planning

A Few Select Insights from the 2019 Heckerling Institute on Estate Planning

“Heckerling presenters emphasized that flexibility in planning will remain key for families and advisors through the on-going roll-out of the TCJA and related guidance.  Given the TCJA’s temporary nature, the possibility for future tax law changes depending on future election outcomes, and the many moving parts of planning for the “modern” family, successful plans will require active management and on-going monitoring of both federal and state tax and legal developments.” 

To read the full report, click here.

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Shifting Gears – Rising Rates and Legacy Planning

“Relatively small shifts in applicable interest rates can have a disproportionate effect on the performance of rate-sensitive legacy planning. Appreciating the potential economic impact of the rate changes and how other factors, such as payment structure, term selection, and asset valuation, also can complement overall performance, may help clients and advisors to better customize the planning to achieve the intended goals.”

To see the full report, click here.

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Protecting Your Charitable Deduction – The IRS Issues Final Guidance

“The IRS has issued long awaited guidance concerning the proper reporting of cash and noncash charitable contributions…Failure to comply strictly with these requirements can result in a denial for some or all of a claimed deduction.”

To read the full report, click here.

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Warning Will Robinson: Tax Reimbursement Clauses May Cause Problems

“As creators (“grantors”) of irrevocable grantor trusts must pay the trusts’ annual income taxes without receiving any trust benefits, advisors typically suggest incorporating a tax reimbursement power that gives the trust flexibility to reimburse the grantor for the tax payment. Despite their prevalence, however, tax reimbursement powers must be crafted and used with care, not simply exercised as a matter of course.” 

To see the full report, click here.

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Tax Court Speaks to Possible Estate Tax Treatment of Generational Split Dollar (GSD)

“Despite positive opinions on GSD gift taxation, the Tax Court’s analysis of the potential estate taxation of economic benefit GSDs will require a long, hard look at these arrangements and their continued viability.  For the first time, two very recent Tax Court opinions (Est. of Cahill v. Commissioner and Est. of Morrissette v. Commissioner) have discussed the court’s view of the estate taxation of economic benefit GSDs.  Neither Cahill nor Morrissette is a final decision on the merits. Yet the court’s reasoning in Cahill strongly suggests that, at least in that case, the Tax Court may find that the parent’s estate includes the full value of the reimbursement right under the economic benefit GSD.  This finding would eliminate the possibility of a significant valuation adjustment for the reimbursement and undercut one rationale for using economic benefit GSDs in estate tax planning.” 

To read the full report, click here.

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A View from the Experts: Select Insights from the 2018 Heckerling Institute on Estate Planning

“Presenters at the 2018 Heckerling Institute on Estate Planning identified several enhanced areas of focus for legacy and life insurance planning post tax-reform, including (1) basis adjustment planning, (2) the potential benefits and pitfalls of portability, especially in light of the doubled federal transfer tax exemptions, and (3) the need to review and refresh existing life insurance planning.”

To read the full report, click here.

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AALU – Moving On: Changing State Tax Residency – Easier Said than Done

 “States have become more sophisticated in challenging residency changes. To ensure a complete change in tax residency, relocating families must know the requirements in both the new and old state, sever as many connections as possible with the old state, and create substantial ties with the new one.”

To read the full report, click here

 

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

“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.”

To read the full report, click here.

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

“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.”

Click here to see the full report.

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