Attention Trustees- Better Understand the Uniform Principal and Income Act

Topics: Estate planning, Trusts

Allocation of revenues (“receipts”) and costs and expenses (“disbursements”) between trust income and principal can directly impact beneficiaries and their rights to distributions. To assist trustees with treating beneficiaries fairly and impartially, most states have adopted a version of the Uniform Principal and IncomeAct (“UPIA”) to provide direction regarding the allocation of receipts and disbursements…

Case Study Series – Trust Decanting in Action: Breathing New Life into Old Trusts

Topics: Estate planning, Trusts

Trust decanting allows a trustee to transfer assets from an existing irrevocable trust to a different irrevocable trust and may be used to address a wide array of issues, including correcting drafting errors, changing distributions standards or beneficiary powers of appointment, amending administrative provisions, and updating fiduciaries and their powers.

Case Study Series- Location, Location, Location – Changing the Situs of an Irrevocable Trust.

Topics: Estate planning, Irrevocable trusts, Trusts

Long-term irrevocable (dynasty) trusts can become inefficient over time. Moving the trust to a new jurisdiction may provide opportunities to refresh the administration of the trust, address state income tax issues, strengthen creditor protection, and decant trust assets to a new trust. The authority to move a trust’s situs may be found in the trust…

Judicial Reformation to Correct Scrivener’s Error in ILIT Will Not Have Adverse Gift, Estate, or GST Tax Consequences

Topics: Estate planning, Irrevocable trusts, Transfer taxes, Trusts

In PLRs 201723002 and 201723003, the IRS ruled on the tax consequences of a judicial reformation of an irrevocable life insurance trust (ILIT) to correct a scrivener’s error that otherwise would have resulted in inclusion of the ILIT assets in the grantor’s estate, against her stated intentions in creating the trust.

“Trouble Ahead, Trouble Behind,” and You Know that Notion Never Crossed My Mind- Avoiding 5 Common Mistakes in Life Insurance Planning.

Topics: Estate planning, Irrevocable trusts, Trusts

According to experts, some of the most common mistakes in life insurance planning include: (1) failure to qualify gifts to irrevocable life insurance trust (“ILITs”) for the annual gift tax exclusion; (2) improper allocation of GST tax exemption to ILIT gifts; (3) retention of incidents of ownership in an ILIT-owned policy; (4) failure to understand…

New Rules on Trust Decanting – Coming to a State Near You

Topics: Estate planning, Trusts

Generally, a trust decanting statutorily authorizes a trustee to transfer assets from an existing trust to a new or another existing trust with different terms. The process allows modifications to irrevocable trusts without expensive judicial proceedings and may be used to achieve a wide range of goals, such as correcting drafting errors, changing administrative or…

Private Trust Companies- The What, Who, How, & Why.

Topics: Estate planning, Trusts

Families with substantial legacies often need long-term trust structures to assist them in the management and preservation of these legacies over multiple generations. Yet, these families often encounter difficulties in finding trustees who are willing to handle complex assets and will remain committed to carrying out the family’s mission over time.