Category Archives: Trust and Estate Attorney

Watch Your Step – Fiduciary Pitfalls for Trustees of Irrevocable Life Insurance Trusts


“Sample cases targeting trustees vividly illustrate unique fiduciary challenges in terms of trust administration and asset management, including for irrevocable life insurance trusts (“ILITs”).  The growing complexity of life insurance products and the potential for increased gifts in the next several years can make ILIT administration far more complicated than anticipated, particularly for non-professional trustees.”

To read the full report, click here.

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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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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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Flipping the Script: Nongrantor Trusts with Grantor Trust Benefits – Can It Be Done?

“With careful planning, donors of nongrantor trusts can achieve benefits similar to those provided by typical grantor trust provisions without triggering grantor trust status.”

To read the full report, click here.

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

“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.”

To read the full report, click here.

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

“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 all such disclosure and reporting activities in the trustee’s sole discretion.  These variations in state laws and increasingly complex trust agreements can present unique compliance challenges and potential liability exposure, particularly for non-professional trustees who lack the necessary experience and administrative infrastructure.”  

To read the full report, click here.

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

“Acquiring life insurance on a surviving spouse inside a CST addresses multiple tax issues – it limits income tax associated with the CST assets and efficiently uses the estate and GST tax exemptions.  This approach also eliminates the need for annual gifts to an ILIT (and corresponding Crummey withdrawal notices) and more complex funding programs, like split dollar arrangements.” 

To read the full report, click here.

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

“Blended families, mobile beneficiaries, and new approaches to trusteeships require a flexible and highly customizable approach to irrevocable life insurance trusts (“ILITs”), one of the most common legacy planning tools.”

To read the full report, click here.

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