Category: Uncategorized
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2026 Planning for the Ultra High Net Worth
Brent chats with Darren Case about what planning looks like this year for ultra high net worth families. They discuss how “basic” planning is key, GST tax planning, using general powers of appointment, trust protectors, intentionally defective grantor trusts, structuring trust flexibility, family limited partnerships, and more!
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We are Muted.
Normally on Wednesday we would publish our new podcast episode, but this week we wanted to mute our personal content to amplify black voices. We hope you will join us in listening and learning so that together we can make steps towards a better future.
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CARES Act Supplements Charitable Giving
The CARES Act, which went into law on March 27, 2020, has several provisions that can supplement charitable giving at almost any level. Largely, this is accomplished by granting a donor a more favorable income tax charitable deduction for gifts to certain charities. A tax deduction then reduces the donor’s taxable income, which in turn…
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5 Ways to Secure Wealth in a Downturn
Although economic downturns, such as the one we are currently experiencing, can have real hardships for many people–there are silver linings for those fortunate to take advantage of them. Reduced values combined with lower interest rates create five (among other) key ways that families can gain advantages in dark economic times. Sell the Family Business…
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Family Businesses Need the Payroll Protection Program Now
Many clients are asking about the Payroll Protection Program (PPP). Here’s a slide deck to help out (based on April 3, 2020 guidance). https://www.slideshare.net/BrentNelson28/payroll-protection-program-for-family-business
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Estate Planning During the COVID-19 Pandemic
The COVID-19 outbreak has shown us that now—more than ever—we need to protect the health and safety of our loved ones. In addition to practicing social distancing and washing your hands, you can also protect yourself, family, and property by creating (or reviewing your current) estate planning documents. For those that haven’t created an estate…
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COVID-19 Has Changed Charitable Trust Planning
COVID-19 is a public health issue that goes far beyond the bounds of this blog. However, focusing only on the economic side of the equation, it is clear the SARS-COV 2 virus, and the needed response to contain it, have had and will have significant effects on the economy. As reported in the Atlantic on…
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Recent Cases Highlight Pitfalls of Unreported Foreign Accounts (Part 2)
As I previously described, in Part 1, under the Delinquent Filing Procedures, a taxpayer with unreported foreign accounts or assets can file the foreign reports late without any penalty. In order to qualify for that treatment, the taxpayer must have had reasonable cause, based on the standards for reasonable cause in various Code provisions and…
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Recent Cases Highlight Pitfalls of Unreported Foreign Accounts (Part 1)
Three cases were recently decided against taxpayers that shed light on the hurdles Americans must climb if they have unreported foreign accounts or assets. As I have previously described here (https://www.swlaw.com/publications/legal-alerts/2586), the IRS has three programs available to help taxpayers come clean, and avoid the full force of civil and potentially criminal penalties for failure…
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Using Limited Partnerships To Bridge International Borders
Planning for an estate that spans multiple international jurisdictions is challenging. One of the hardest aspects is to create a structure that allows family members to control the family assets in each jurisdiction without unnecessary disruption from incapacity or death. Not every country recognizes trusts as a legal entity. Even when trusts are recognized in…
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Trusts Are Now the Best IRA Beneficiaries
I have previously written about the complexity that the Secure Act has introduced to trust beneficiaries here and here. I also previously suggested that under the current rules, naming a trust that can flip between a Conduit Trust and an Accumulation Trust, depending on the age of the IRA owner and the classification of the…
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IRA Trust Beneficiaries After The Secure Act
There are two schools of thought on naming at trust as a beneficiary of an IRA: (1) NEVER DO IT, and (2) do it if it meets your goals. The First camp lives and dies on the belief that naming a trust accelerates distributions from the IRA–thus more tax sooner, and that is usually bad.…
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SECURE ACT TOP 5
The SECURE Act became law on December 20, 2019. It changes quite a few of the rules relating to retirement plans, but there are really FIVE major changes that effect individuals. Here they are: Repeals Age Limit on Traditional IRA Contributions. It used to be that contributions to traditional (non-Roth) IRAs were prohibited after age…
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S Corporations With Foreign Owners
The 2017 Tax Cuts and Jobs Act changed the rules dramatically with respect to S corporations in one particular: non-citizen non-resident shareholders. Before the change, non-citizen non-residents of the U.S. could not own S corporation stock. Period. Even marrying into S corporation stock, or getting it from a deceased relative, would violate the rule for…
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Teach Children Financial Responsibility
As the year draws closer to an end, many parents will consider making gifts to their adult children. Part of that gift giving conversation should include a discussion of how to manage money and how to responsibly invest. Before making gifts of any significance, parents could consider the following three key elements of successful financial…
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Tax Court Highlights the Folly of Indirect Gifts
There was a time, and there may well be one again (see Bernie’s plan), when each person did not have an $11.4 million (in 2019) federal gift tax exclusion amount. In 1995 the federal gift tax exclusion amount was $600,000. That is significant, because the U.S. Tax Court recently confirmed in William Cavallaro v. Commissioner…
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An International View of Faulty ILITs
When international estate tax rules are layered onto common errors in Irrevocable Life Insurance Trusts (“ILITs”), the consequences can be dire. PLR201941008 illustrates one common drafting mistake that can cause havoc for cross-border families. ILITs have been a mainstay in U.S. estate planning for decades. The premise of the trust is that it can accomplish…
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Estate Plans That Stick
An estate plan is a snap shot. It takes into account the facts and circumstances that one knows or anticipates at a particular moment in time. Although estate planning professionals preparing documents try to think about what could happen in the future and control for unanticipated circumstances, it is an inexact art. There is no…
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5 Mistakes Canadians Make in America
Failure to count days. Canadians who spend time in the United States, absent an exception, must be mindful that the number of days they spend in the United States could make them tax residents here. The result of becoming a United States tax resident is that all of the individual’s worldwide income is taxed here…
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Violating IRA Rules Has Harsh Results
The rules related to withdrawals of IRA funds (and other funds in defined contribution accounts) are strict and often harsh to the unwary. On September 19, 2019, the U.S. Tax Court issued an Order in Rosenberg v. Commissioner that emphasizes this point. As part of a divorce order, Mr. Rosenberg’s former spouse was ordered to…
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Introduction
Personal and family wealth exist in a vast and complicated legal structure. Laws touch every aspect of wealth, often in ways that are surprising, or, at least, not well understood. From centuries olds laws, like those governing Wills, and modern laws, like the regulation of crypto currencies, the legal structure surrounding wealth is like an…