Category Archives: Breaking News & Industry Updates

Wealth Management.com – “Green Book Signals Green Light to Grandfathered Estate Planning”

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“Now that we have the Green Book, which covers all of the same ground as the STEP Act, it seems that we no longer need to be concerned with retroactive provisions and can advise clients to take certain proactive steps….Green Book = Green Light.”

To read the full article, click here.

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Finseca: What comes around goes around – Charitable Remainder Trusts and Wealth Replacement Life Ins Return to Spotlight

“As part of their comprehensive legacy plan, clients who are charitably inclined, hold significant highly appreciated assets, and wish to create a lifestyle “annuity” should consider a CRT, especially if they can benefit from an income tax charitable deduction. Selling an appreciated asset inside a CRT may provide an economically superior result compared to selling the same asset in a client’s own hands, especially when done in conjunction with purchasing additional life insurance through an irrevocable life insurance trust (“ILIT”).”

To read the full article, click here.

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NY Times – “How the Wealthy Are Trying to Anticipate Biden’s Tax Increase”

“Financial advisers say they have been flooded with calls from clients who are trying to predict which of President Biden’s tax proposals will become law….I don’t know where we’re going with any of these taxes,” said Bill Schwartz, managing director of Wealthspire Advisors, which advises clients with $5 million to $20 million in assets. “But I do know it’s really difficult right now to justify what people call a loophole or what I call using the tax code to your advantage. In fact, it’s really hard to justify any of these techniques for the affluent right now, not that I think they’re right or wrong.”

To read the full article, click here.

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Finseca (AALU): “An Honest Look at Saving Taxes by Relocating from California or New York”

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“Individuals and businesses in high tax jurisdictions have been expressing unprecedented interest in relocating to states with more manageable tax regimes. This is especially the case with business owners looking to sell their businesses. But whether this trend rises to the level of an “exodus”—as many characterize it—is up for debate. The impetus for moving typically runs deeper than just taxes, though taxes often are the proverbial final straw. This article analyzes tax issues individuals and businesses should consider when evaluating whether to relocate from California or New York.”

To read the full article, click here.

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2021 Tax Outlook – The Biden Plan

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“President Biden campaigned on a tax plan that would raise almost 4 trillion dollars – primarily by increasing taxes on individuals making more than $400,000 a year and raising the corporate rate. While the entirety of the plan is unlikely to become law this Congress it does provide a menu of policy options that Democrats in Congress will consider, especially once they turn to the forecast infrastructure and climate change bill expected this summer….What is likely to move forward, and what is likely to slip off the agenda?”

To read on for a breakdown on the prospects of the Biden tax plan in 2021, click here.

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The Estate Tax May Change Under Biden Affecting Far More People

NYTimes

 

An interesting article in today’s NY Times authored by Paul Sullivan.  He writes, “So the question for taxpayers now is:  What happens once Mr. Biden can begin enacting changes in tax policy?  The biggest long-term change involves the estate tax.”  Sullivan goes on to discuss the possible loss of step-up in basis, “A Biden administration may move to change this for logical and revenue reasons.  Imagine trying to determine the capital gains from AT&T stock that your grandmother bought in 1943 when record-keeping was done with a pencil and paper.  Today, cost-basis information can be retrieved in seconds.”  He goes on to discuss some of the inherent problems in this approach.

A different approach could be adjustment to current estate tax exemptions and rates.  “With Democrats controlling the legislative and executive branches, there is concern that the exemption level could drop to $5 million or even $3.5 million…For the wealthiest in the country, the bigger concern is the rate itself.  It’s now at 40%, but it was as high as 55% in 2001.”

To read the full article, click here.

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Trust Modifications: Innovative Techniques for Outdated Instruments

Happy Thanksgiving to All:

“Although the grantor of an irrevocable trust surrenders the right to revoke the trust and amend its terms, the restrictions are no longer as limiting as they once were. Alternatives to judicial modifications abound. From nonjudicial settlement agreements to new trends in decanting practices to innovations in modifications by consent, clients, trustees, and beneficiaries have many potential avenues for modifying an irrevocable trust to accomplish their legacy planning goals.”

To read the full report, click here.

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Zooming Into a New Age of Trust Situs

“The novel coronavirus has led many people – trustees, trust beneficiaries and advisors alike – to relocate their primary workplace or residency for the time being, sometimes across state lines.  An irrevocable trust’s situs, or place of administration, may be impacted as this migration continues through the pandemic and likely into the future.  The results may be intentional or inadvertent, with each having its own benefits and risks that should be evaluated both opportunistically and out of an abundance of caution.”

To read the full report, click here.

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NY Times – “Millionaires Are Staying Put Despite New Tax”

NYTimes

 

“New Jersey recently decided to impose a so-called millionaires tax — effectively increasing state taxes 20 percent on people earning more than $1 million.

“Critics had an immediate, and unsurprising, reaction, arguing that such taxes will push the wealthy to move to lower- or no-tax states. But is that true?

“While some wealthy people will move, proponents of these taxes argue, few will make good on the threat to move to Florida (with no state income tax) or, in New Jersey’s case, to Pennsylvania (where the state tax rate is one-third its neighbor’s rate). They argue that high earners and entrepreneurs have family and community ties that keep them from moving away.”

To read the full article, click here.

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