Category Archives: Trust and Estate Attorney

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

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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Trust Modifications: Innovative Techniques for Outdated Instruments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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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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