Trusts

Comparing Retirement Income Strategies, SCOTUS Case on State Taxation of Trusts, Section 1035 E

Topics: 401(k), Estate planning, IRS, Qualified Plans, Regulation, Retirement security, Trusts

April 25, 2019 Wealth Transfer U.S. Supreme Court Hears Case on States’ Ability to Tax Trust Income A case with significant implications for States’ ability to tax trust income was before the U.S. Supreme Court on April 16, when oral arguments were heard in the case of North Carolina Department of Revenue v. Kimberly Rice...

Spousal Lifetime Access Trusts (SLATs) and Divorce – What You Don’t Know….

Topics: Estate planning, Spousal Lifetime Access Trusts, Trusts

The SLAT, a lifetime irrevocable trust created for the benefit of the donor’s spouse, arguably allows the donor to indirectly benefit from the trust assets (through distributions to the spouse) should the need arise. A subsequent divorce, however, typically results in the loss of this indirect benefit for the donor, although he or she may…

ABCs of Structured Annuities, Risks + Rewards of Roth IRAs Under TCJA, Avoiding RMD Tax-Time Surprise, and More

Topics: Annuities, Estate planning, Life insurance products, RMDs, Trusts

March 29, 2019 Assets Under Management The ABCs of Structured Annuities Structured annuities are a relatively new annuity construction that are similar to structured notes, but offer the potential for tax-deferred growth. In this Think Advisor piece, Scott Stolz explains how structured annuities compare to other annuities as well as the pros and cons of…

A Few Select Insights from the 2019 Heckerling Institute on Estate Planning.

Topics: Estate planning, Estate tax, GST, Nongrantor trusts, Trusts

The WRMarketplace is created exclusively for AALU members by experts at Baker Hostetler LLP and the AALU staff, led by Jonathan M. Forster, Partner, Rebecca S. Manicone, Partner, and Carmela T. Montesano, Partner. WR Marketplace #19-05 was written by Edward J. Beckwith, Partner, and Jennifer M. Smith, Counsel, Baker Hostetler LLP. The AALU WR Newswire…

Generational Split Dollar (GSD): Where Are We Now?

Topics: Estate planning, Split-dollar, Trusts

Economic benefit (“EB”) GSDs involve a split-dollar arrangement between a parent and his life insurance trust to fund the trust’s purchase of life insurance on the parent’s child. For wealth transfer planning purposes, EB GSDs assume that the present value of the repayment owed to the parent for premium payments is subject to a significant…

Protecting Your Charitable Deduction – The IRS Issues Final Guidance.

Topics: Charitable giving, Estate planning, Trusts

To support and encourage charitable giving, the Internal Revenue Code (“Code”) provides an income tax deduction for contributions to qualified charities. After the Tax Cuts and Jobs Act of 2017 (“Tax Act”), this is one of the only substantial deductions left to wealthier taxpayers. However, the substantiation rules for claiming this income tax deduction are…

Outlook Not So Good:  Tax Court Speaks to Possible Estate Tax Treatment of Generational Split Dollar (GSD).

Topics: Estate planning, Irrevocable trusts, Split-dollar, Trusts

For the first time, two very recent Tax Court opinions (Est. of Cahill v. Commissioner and Est. of Morrissette v. Commissioner) have discussed the court’s view of the estate taxation of economic benefit GSDs. These arrangements generally involve a parent who enters into a private split-dollar agreement with a life insurance trust agreeing to pay…

Flipping the Script: Nongrantor Trusts with Grantor Trust Benefits – Can It Be Done?

Topics: Estate planning, Grantor trusts, Non-grantor trusts, Trusts

Grantor trusts, which tax the trust’s income to the trust creator (“donor”), have long been a planning mainstay, as they can enhance growth in the trust and offer significant flexibility in transactional planning with the donor. As discussed in WRMarketplace No. 18-03, however, new limits on tax deductions, including for state and local taxes, may…