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…

Decoding Tax Reform: Grantor vs. Nongrantor Trusts – Which Way Do I Go?

Topics: Estate planning, Grantor trusts, Trusts

H.R. 1 (“Tax Act”) has dramatically altered the tax consequences and economics of many common irrevocable trust plans given the combination of higher exemptions for gift, estate, and generation skipping transfer taxes (collectively “transfer taxes”) and changes to the taxation of individuals and trusts. Grantor trusts, which tax the trust’s income to the trust grantor,…


Topics: Estate tax, IRS, Regulation, Trusts

In a recently-released series of apparently related PLRs, the IRS has again reviewed the tax consequences of incomplete gift, non-grantor (“ING”) trusts of married spouses involving the transfer of community property.

Reciprocal Trusts – A Refresher

Topics: Estate planning, Trusts

Legacy planning for spouses and other related parties often involves the creation of mutually-beneficial irrevocable trusts to provide equal protection and benefits for each party (e.g., spouses may each wish to establish a spousal lifetime access trust (SLAT) for the benefit of the other). Mutually-beneficial trusts, however, can run afoul of the reciprocal trust doctrine,…