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Category Archives: Financial Planning

Finseca (AALU): “You Snooze, You Lose . . . Year End Planning – Our Top Three Ideas”

- November 22, 2024

The Washington Report: – Wealth Transfer Edition

“The close of 2024 is the ideal time to initiate planning to maximize the remaining fruit of the TCJA, while beginning to position for a new, but familiar, landscape following the potential sunset. These approaches should work well regardless of the new tax environment. Clients looking for areas of impact should focus on (1) Roth conversions; (2) optimizing charitable deductions; and (3) acquiring life insurance.”

To read the full report click here.

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Posted in: AEG, Blog, Estate Planning, Financial Planning, Finseca, Tax Planning
Tagged with: AEG, Blog, Estate Planning, Financial Planning, Finseca, tax planning

Finseca (AALU) – ” Rising Rates and Falling Markets – A Focus on Life Insurance Third-Party Premium Financing and Loan Regime Split Dollar Arrangements”

- August 19, 2022

“Life insurance continues to play a vital role in legacy planning because of its unique value proposition – a source of income tax efficient liquidity, efficient wealth transfer on a multi-generational basis, a mortality hedge, a non-correlated asset class, and strong internal rates of return relative to the current stock market. Nonetheless, advisors should evaluate how higher rates and a volatile market may impact the performance of both new and existing life insurance funding approaches.”

Click here to read the full report.

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Posted in: Blog, Breaking News & Industry Updates, Estate Planning, Financial Planning, Finseca, Life Insurance
Tagged with: AEG, Blog, Estate Planning, Financial Planning, Finseca, life insurance

Finseca (AALU): Optimizing Beneficiary Designations For Retirement Plan Beneficiaries

- March 18, 2022

“For many clients, especially public company executives, retirement plans can constitute a significant portion of their wealth. Determining the proper beneficiary for a client’s retirement plans is an integral part of their overall legacy plan. The identity of the selected beneficiary (e.g., spouse, descendants, trust, charity) can greatly affect the income tax impact and thus a family’s lasting legacy.”

To read the full report, click here.

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Posted in: AEG, Blog, Breaking News & Industry Updates, Financial Planning, Finseca
Tagged with: AEG, Blog, Financial Planning, Finseca

Finseca (AALU): “Lessons from Smaldino v. Commissioner: The consequences of rushed planning”

- February 18, 2022

Finseca_logo

 

 

 

“The “step transaction” doctrine is alive and well. In the foot-race to beat potential tax law changes, families often miss the forest from the trees. The economic realities and entity formalities must be respected in the execution of a gift transaction….On November 10, 2021, the Tax Court rendered its decision in the case of Smaldino v. Commissioner, which involved a purported gift of LLC interests by Mr. Smaldino to his wife, followed by a purported gift of the same LLC interests, the very next day, from Mrs. Smaldino to a dynasty trust for the sole benefit of Mr. Smaldino’s children from a prior marriage. The Court found a series of ignored formalities, and that as a practical matter there was never a time when Mrs. Smaldino would have been able to effectively exercise any ownership rights with respect to the LLC interests “given” to her. The Court held that Mr. Smaldino never effectively transferred any LLC interest to Mrs. Smaldino, and consequently the dynasty trust received its entire LLC interest from Mr. Smaldino, creating a taxable event.”

To read the full report, click here.

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Posted in: AEG, Blog, Estate Planning, Financial Planning, Finseca, Life Insurance, Tax Planning
Tagged with: AEG, Blog, Estate Planning, Financial Planning, Finseca, life insurance, tax planning, Trust Planning

Finseca (AALU) – “Life Insurance Mistakes that Keep Attorneys Up at Night”

- December 23, 2021

2021 was a strange and challenging year in the estate and tax planning field, particularly life insurance….In the rush to address and mitigate potential consequences before they came into existence, practitioners, advisors, and clients all made decisions and took actions which, in retrospect, may not have been most advisable, were just plain mistakes, or failed to plan for the problems that these actions had potential to cause in the future, regardless of whether any of the concerning factors came to fruition. This article describes many of these “mistakes” which occurred due to rushed planning and may serve as a warning if we are (and we will be) faced with similar situations in the future.

To see the full report, click here. 

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Posted in: AALU, Advice and Tips, AEG, Blog, Breaking News & Industry Updates, Estate Planning, Financial Planning, Finseca, Trust and Estate Attorney
Tagged with: AALU, AEG, Blog, Estate Planning, Financial Planning, Finseca, life insurance, tax planning, Trust Planning

Finseca (AALU) – First, do no harm – Estate planning for an unknown future

- November 24, 2021

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There is an adage in the medical field that applies to planning for insurance trusts right now, namely: “First do no harm”.  What is particularly difficult for estate and tax practitioners today is they are being asked to plan for previously proposed legislation that, while currently out of the legislative debate, might resurface and pass in the future. Given this situation, what can we do to position our clients so that we are helping them in the event that the now shelved legislation reenters the debate and is passed, while simultaneously not hurting them if the laws do not change?

To read the full report, click here.

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Posted in: AEG, Blog, Breaking News & Industry Updates, Estate Planning, Financial Planning, Finseca, Tax Planning
Tagged with: AEG, Blog, Estate Planning, Financial Planning, tax planning

Finseca (AALU) 🔴 President Biden Releases Framework on Spending Package

- October 28, 2021

BREAKING NEWS from Finseca:

This morning, President Biden delayed his trip to see the Pope to meet with Congressional Democrats about moving forward on the Bipartisan Infrastructure bill (BIF) and on the reconciliation bill (Build Back Better plan, or BBB). In concert with that meeting, the White House released two documents (below) explaining the current state of play on the reconciliation package.

We view this as an offer, not a conclusion. These documents are focused on the big picture items. They leave out many important details. There are other items not covered here that key Democrats have said must be addressed in a final deal (i.e. SALT).

Here are the things we are watching closely:

  • Grantor Trusts. We do not read their absence from this document as a guarantee that they are off the table.
  • Millionaires Surtax. To what definition of income is this being applied?
  • 199A. While this document is silent on 199A adjustments, it does reference expansion of the Net Investment Income Tax. The House bill expanded that to cover active passthrough income, a small business tax increase.
  • Estate Tax Exemptions Expiration. Not addressed in the announced framework.

Again, this is a very fluid situation. Please don’t hesitate to reach out with questions.

Armstrong Robinson
Chief Advocacy Officer, Finseca

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Posted in: AEG, Blog, Breaking News & Industry Updates, Estate Planning, Financial Planning, Finseca, Tax Planning
Tagged with: AALU, AEG, Estate Planning, Financial Planning, Finseca, tax planning, Trust Planning

WSJ: What Peter Thiel’s Roth IRA Means for Yours

- July 06, 2021

WSJ

 

An interesting article by Laura Saunders for the Wall Street Journal on July 2, 2021.

“Large Roth IRAs owned by the superrich are in the tax spotlight now, and all savers should consider the implications for their own retirement accounts….The story [ProPublica] claimed some wealthy Americans have multimillion- or even billion-dollar, tax-advantaged retirement-savings accounts. The largest one cited was a Roth IRA with $5 billion in assets (as of 2019) belonging to PayPal founder and investor Peter Thiel.”

To read the full article, click here.

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Posted in: AEG, Blog, Financial Planning
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NY Times – “How the Wealthy Are Trying to Anticipate Biden’s Tax Increase”

- May 01, 2021

“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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Posted in: AEG, Breaking News & Industry Updates, Estate Planning, Financial Planning, Tax Planning
Tagged with: AEG, Estate Planning, Financial Planning, tax planning

“What Jeffrey Epstein Did to Earn $158 Million From Leon Black?”

- January 27, 2021

A very interesting article in today’s NY Times Business Section.  Estate planners will be surprised at the issues discussed.

“The answer: help rich people pay less in taxes.  In the case of Mr. Black, the chief executive of Apollo Global Management, his advice could have been worth as much as $2 billion in savings, according to a law firm’s review of Mr. Black’s business dealings with Mr. Epstein….Mr. Epstein’s specialty was suggesting ways for wealthy clients to use sophisticated trusts and other investment vehicles to reduce their tax liability while passing on assets to their children, according to documents reviewed by The New York Times and interviews with 11 people familiar with his work. In the process, he collected hefty fees — usually based on a cut of the anticipated tax savings….In Mr. Black’s case, according to the review by the law firm Dechert, the savings were enormous: about $1 billion for a single GRAT.  Mr. Epstein’s detection of a problem in a trust set up in 2006 and his proposed solution were “the most valuable piece of work” that he performed, the report said.  “Outside legal counsel described the solution as a ‘grand slam,’” according to the Dechert report, which was commissioned at Mr. Black’s request after The Times reported in October that he had paid Mr. Epstein at least $75 million in fees.”

To read the full article, click here.

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Posted in: Blog, Financial Planning, Tax Planning, Trust and Estate Attorney
Tagged with: AEG, Blog, Estate Planning, Financial Planning, tax planning, Trust Planning
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Finseca (AALU) – “409A Traps for the Unwary: Split-Dollar Life”

The Washington Report – Business Uses Edition Given the potential for significant adverse tax results, compensatory split-dollar programs should be reviewed by a 409A tax expert for compliance. That review should occur not only when…

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