Summer 2020 Advisor Newsletter
Transfer-for-value rule: An often-overlooked life insurance tax trap.
By Eva Stark, JD, LL.M.
One notable tax benefit of life insurance is that death proceeds are generally received by a beneficiary free of any income taxation. However, this benefit may be lost if a policy is transferred in a manner that the “transfer-for-value” rule is triggered. This article explores this often-overlooked tax trap and its exceptions.
Special feature: Optimizing lifetime gifts for the 99%.
By guest author Jeff Chadwick, JD
Attorney Jeff Chadwick, member of the Wealth Preservation Practice Group at Winstead, PC, provides an in-depth look at current planning opportunities using lifetime gifting strategies in a two-part feature.
In part 1, Chadwick presents a broad overview of lifetime gifting strategies, focusing on the 99.8% of Americans without taxable estates. Advisors working with these clients should identify the clients’ non-tax objectives and plan to minimize income taxes and reporting obligations.
Special feature: Optimizing lifetime gifts in light of legislative uncertainty.
By guest author Jeff Chadwick, JD
Attorney Jeff Chadwick, member of the Wealth Preservation Practice Group at Winstead, PC, provides an in-depth look at current planning opportunities using lifetime gifting strategies in a two-part feature.
In part 2, Chadwick addresses transfer tax planning in light of legislative uncertainty. For most clients, it can be more appropriate to plan for income tax savings rather than transfer tax savings, which will require creative solutions designed to increase exemptions prior to 2026.
Previous Newsletters
Spring 2020 Advisor Newsletter
Creating a flexible estate plan through powers of appointment.
By Eva Stark, JD, LL.M.
In this time of uncertainty, it is impossible to anticipate all future changes in applicable tax laws, much less changes in family dynamics or personal finances. For these reasons, powers of appointment (as well as other estate planning tools) are often used to incorporate flexibility into estate plans. This article discusses how the use of powers of appointment could position beneficiaries to avoid inadvisable distribution schemes and capitalize on tax law changes.
Coronavirus Aid, Relief, and Economic Security (CARES) Act Establishes $2.2 Trillion Financial Backstop to U.S. Economy in Time of Crisis
By Matt Pate, JD, LL.M.
In a special feature article, estate planning and tax professional Matt Pate of The Nautilus Group provides a thorough overview of the important and timely provisions included in the recently enacted $2.2 trillion CARES Act. He reviews the SBA Paycheck Protection Program (PPP), expected to be utilized by small businesses on a massive scale, as well as individual income tax items including the 2020 rebates and enhanced qualified plan distribution and loan provisions.
Trustee selection considerations
By Eva Stark, JD, LL.M.
Many estate plans incorporate a revocable trust, an irrevocable trust, or both. However, who should or should not serve as trustee for these trusts? Should an individual or a corporate trustee be selected? This article discusses the role of the trustee and provides a few important considerations for selecting a trustee.
Winter 2020 Advisor Newsletter
Basic estate planning considerations and documentation
By Eva Stark, JD, LL.M.
A significant number of Americans have no estate plan in place in the event of premature death. This may be due to not making time to address a seemingly far-off problem, avoiding potentially difficult conversations and decisions, not wanting to think of one’s mortality, or the perceived high cost of working with attorneys and other professionals. However, failing to plan can have consequences that could be very costly both financially and in terms of an undesirable outcome, delay and family disharmony. This article discusses general estate planning considerations and the documents incorporated into the typical estate plan.
Value and private enterprise
By Wes Shelton, CEPA, CM&AA, SM2 Advisors
As Baby Boomers prepare to retire, as much as six trillion dollars will change hands as privately owned businesses are transitioned to new owners. Yet most business owners are not afforded an understanding of how to maximize the value of their enterprises when they are ready to make that move. This article explores the ways that business owners can appeal to private capital markets and the opportunities this gap presents for advisors.
Impact of large gifts, “clawback” under estate tax law's potential sunset in 2026
By Matt Pate, JD, LL.M.
The current environment for estate and gift tax exemptions is a favorable one, but it won’t last. This article describes anti-clawback regulations which provide welcome guidance for those contemplating large gifts prior to sunset, as well as those who may have made large gifts and paid gift tax prior to the increase in the exemption in 2017; but it is important to note that the current increased exemptions do not appear to permit preservation of the marginal difference through gifting.
