Estate Plans in Uncertain Times

Estate Plans In Uncertain Times

With 2006 fast approaching I can’t help but pause to think about our estate and gift tax regime. The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 changed the rules of the game. Following the enactment of EGTRRA estate planners and tax attorneys went to work defining and clarifying how estate plans should…

Entrepreneur Rollover Stock Purchase Plans

Entrepreneur Rollover Stock Purchase Plans

Financing a business start-up can be a challenge. Most traditional lenders require that a business be operational for at least a year before they will provide small business loans. Moreover, venture capitalists are quick to reject most start-up proposals and if the venture capitalist is willing to fund the start-up they typically demand a significant…

Basic Estate Administration and Taxes: Elections & Timing

Basic Estate Administration And Taxes: Elections & Timing

This post is written to remind non-tax attorneys who administer estates of a few basic tax issues that must be considered in administering estates. From a tax perspective, estate administration is all about making elections and timing distributions, income and expenses. IRC 441 The first group of elections involves selecting tax years. IRC § 441…

Sometimes It is Best Not to NIMCRUT

Sometimes It Is Best Not To Nimcrut

The best laid tax plans often go awry as tax laws and life circumstances change. In other cases tax plans go awry because they were improperly conceived. I have been encountering a number of NIMCRUTs that should not have been undertaken. The NIMCRUT, otherwise known as the net income with makeup charitable remainder unitrust, is…

Taxes & Gay and Lesbian Marital Rights

Taxes & Gay And Lesbian Marital Rights

Various states have enacted laws to stop recent attempts by gay and lesbian groups to achieve full marital equality.  While these laws address marital rights, they do not address rights when it comes to fair treatment for Federal income tax purposes.   The Dispute: Filing Status What would a challenge to fair treatment for Federal income…

Trust as the IRA Beneficiary

Trust As The Ira Beneficiary

I continue to hear a number of financial planners, accountants and even attorneys say, “Don’t name a trust as the beneficiary of an IRA. ” The rationale is that naming individuals as the IRA beneficiary is preferable because the individual can take the IRA distributions over the course of the beneficiaries lifetime; whereas, a trust…

The (D)Evolution of our Tax Law

The (d)evolution Of Our Tax Law

Our tax laws seem to evolve (devolve?) over time. This evolution seems to follow a pretty predictable pattern. I will use Action on Decision 2005-001, which is an interesting decision in and of itself, to describe this process. In this AOD the IRS announces that it will not follow the Ninth Circuit Court of Appeal…

Taxation of Settlement Agreements for Plaintiffs Attorneys

Taxation Of Settlement Agreements For Plaintiffs Attorneys

Settlement awards can be structured in a number of different ways.  This presents a number of tax planning opportunities.  But for the typical settlement award, the tax consequences are somewhat standard. Including the Settlement in Income One of the tax issues for settlement awards is whether the award can be excluded from the clients income. …

Estate & Trust Attorneys Will Increasingly be Subject to Malpractice Actions Brought by Beneficiaries

Estate & Trust Attorneys Will Increasingly Be Subject To Malpractice Actions Brought By Beneficiaries

It is now well established that a plaintiff s attorney should be subject to malpractice liability for not proposing a structured settlement annuity versus a lump sum payment to their injured clients and for not seeking the advice and assistance of a competent financial adviser in the process. The principles underlying this type of malpractice…

Taxpayer: It’s All About Valuation; IRS: We’re Damned if We Do

Taxpayer: It’s All About Valuation; Irs: We’re Damned If We Do

Many tax practitioners agree that valuing property for tax purposes is the most important issue that they face. Yet valuation issues are often murky and amorphous. In most cases valuation disputes are resolved in favor of the party that has the most convincing valuation expert. In other cases valuation disputes are resolved on even less…