Tag Archives: AEG

“Charting a Path for Planning Your Estate”

A very interesting article in the Business Section of the New York Times on Saturday, July 25th.  On-Line in “Wealth Matters” the article is entitled, “Need Help With Your Estate Plan? Go With The Flow, Advisors Say.”

“As older adults face mortality during the pandemic, lawyers and wealth advisers are using color-coded documents and flowcharts to help them understand estate planning.”  Andrew D. Hendry, vice chairman and general counsel for Colgate-Palmolive understood complicated legal documents.  “But when it came to his estate plan, Mr. Hendry, like many others, was not terribly interested in digging through hundreds of pages of legal documents….He found comfort in what his wealth adviser had created: a series of color-coded documents that laid out exactly who got what, when and why….‘I’m a lawyer, and I understand estate planning documents have to be pretty heavy for the estate plan to work. But they’re really not useful to make a decision….’  ‘More people are looking to review their estate plans if something happens, but it’s hard to keep track of everything without a schedule like this,’ said John J. Voltaggio, a managing wealth adviser at Northern Trust who creates color-coded charts and simple spreadsheets for his clients, including Mr. Hendry. ‘We have that on one page. And then we can ask, ‘Should we update any of it?’”

To read the full article, click here.

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Highlights from the 54th Annual Heckerling Institute on Estate Planning

“Modern strategies for legacy planning with today’s clients were the focus of discussions at the 2020 Heckerling Institute on Estate Planning.  The 54th Annual Heckerling Institute on Estate Planning (the “Institute”) focused on the ongoing effects of the Tax Cuts and Jobs Act (“TCJA”), including: (1) legal and regulatory developments concerning life insurance; (2) benefits and burdens of grantor and non-grantor trust status; (3) planning considerations for migratory clients; (4) state income taxation; (5) implications of the SECURE Act; and (6) planning for the generation-skipping transfer (“GST”) tax on nonexempt trusts.”

To read the full report, click here.

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AALU: Legacy Management: A Fresh Look at an Age-Old Business

While traditional estate plans may cost less, the value added with a comprehensive legacy management approach generally exceeds its marginally higher expense. Proactive management supported by a cooperative multi-disciplinary team helps families see what is on the horizon and efficiently navigate changes. Professional services rendered to implement and maintain a plan also eliminate many costly issues that routinely emerge when clients use a less sophisticated or “DIY” approach.

To read the full report, click here.

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AALU: Post-Mortem Liquidity Planning: A Fiduciary’s (Limited) Toolbox

“In the absence of life insurance, options for fiduciaries to generate needed liquidity for estate taxes and expenses may be limited, creating additional hurdles for estate administration and post-mortem planning.” 

To read the full report, click here.

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The §6166 Estate Tax Deferral for Closely Held Business: Q&A’s

“In business succession planning, a §6166 deferral election may provide a powerful post-mortem planning tool to help minimize the initial strain on the estate and prevent a forced sale of the estate’s business interest. However, the election’s complex administrative and compliance requirements and the potential for payment acceleration make it an insufficient substitute for lifetime succession planning.”

To read the full report, click here. 

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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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Buy-Sell Basics – A Brief Introduction

“Buy-sell arrangements (“BSAs”) address how the business or other business owners can “buy-out” an owner’s interests after a specified triggering event, such as death.  To be effective, the terms and structure of a BSA must be tailored to the unique needs of each business and business owner; there is no “one size fits all” form.  BSAs also should take a comprehensive approach to buy-outs, addressing not just an owner’s death, but also disability, divorce, and bankruptcy, among other events.  Business valuation and buy-out funding are also critical to a BSA’s success.”

To read the full report, click here.

 

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Out with the Old, In with the New – Revitalizing or Unwinding Existing ILITs

“In legacy and life insurance planning, using ILITs to acquire life insurance was almost automatic. Now, with lower federal estate tax rates and higher exemptions, some clients may feel saddled with old ILITs that no longer match their goals or provide the intended tax benefits, even though retention of the life insurance makes financial and investment sense.” 

To read the full report, click here.

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Spousal Lifetime Access Trusts (SLATs) and Divorce – What You Don’t Know…

“Per Notice 2018-37, the IRS plans to issue future guidance that could help clarify the income taxation of SLATs, post-divorce.  Regardless, clients and advisors should be proactive in addressing these issues when planning with SLATs.  New SLATs should incorporate trust provisions that specifically address spousal trust rights in the event of a divorce.  Existing SLATs should be reviewed to confirm the impact of divorce, with consideration given to addressing spousal trust rights in a post-nuptial agreement if the SLAT fails to do so. Clients with existing SLATs that are contemplating divorce should review the SLAT’s tax ramifications as part of their negotiations, well before any final settlement, and consult with a tax advisor in collaboration with the divorce attorney to coordinate the technical tax aspects of any settlement.”

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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