The probate question I get asked the most often is whether a client should use a living trust to avoid probate. In many states the answer is an unqualified “yes.” In Texas, the answer is “it depends, but probably not.”
A living trust is a revocable trust to which the client will transfer his or…
Asset protection planning is complicated. While estate and trust law changes very slowly, debt/creditor law can be quite dynamic in comparison. Good planning needs to take the long term perspective, and avoid a cookie cutter appearance.
Based on my experience, there are a few general rules I follow.
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In my last blog post I noted that it might be a good time to reconsider discount planning with family limited partnerships (FLP). That thought has only increased over the last few weeks as the chances for tax reform dwindle. Indeed, while political predictions are a fools game, we now have to seriously consider a…
Earlier in the year the Treasury announced that it would undertake a review of regulations issued since January 1, 2016. Recently, in Notice 2017-38, the Treasury identified eight regulations for burden reduction, including the controversial proposed regulations under Internal Revenue Code 2704. Those proposed regulations would have severely restricted the use of valuation discounts in family…
I learned a pitching technique that has really helped me, and want to pass it along.
As we watch Congress for clarity on tax reform, I am reminded of the Tom Petty song “The Waiting.” Many clients are frozen, unwilling to do any planning. However, the fact is tax law changes all of the time, and any “reform” today may be gone tomorrow. Life and death go on. The real…
There are three basic types of intellectual property (IP): copyrights, trademarks and patents. Copyrights do not protect ideas, but do protect the way those ideas are expressed. Trademarks protect logos, slogans or other ways a business is identified. Patents protect inventions.
IP presents unique challenges for estate and business planning. It is a difficult…
Estate of Powell, http://ustaxcourt.gov/UstcInOp/OpinionViewer.aspx?ID=11260, is a recent Tax Court case that illustrates how not to do it. It involved perhaps the most aggressive deathbed planning I have ever read about. The decedent’s son, acting under a power of attorney that didn’t give him full authority to do the planning he undertook, transferred marketable securities…
A colleague of mine, who was named as executor under the will, is faced with the not uncommon circumstance of managing the two children heirs who don’t like each other. He can’t yet act for the estate, but there is the real possibility that things could escalate into an ugly and unfortunate situation. In these…
Variable prepaid forward contracts (VPFC) are used to diversify a concentrated position in a publicly traded stock, and defer tax on the sale. Here is how they work: taxpayer (i) pledges the stock to a counterparty, (ii) receives cash equal to a percentage of the fair market value of the stock (typically 75-85% of the…
