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IRS Proposes Regulations to Limit Strategy to Avoid Estate Tax

By Jason Palmisano

The IRS has issued a notice of proposed regulations to limit the valuation discounts individuals have been afforded when they engage in certain types of intra-family transfers involving their family owned corporation or family partnership.  Under the proposed regulations, the valuation discount — sometimes up to 40% — that is given for the transfer of assets that have limited liquidation rights would not apply for “deathbed” transactions, only to transfers that occur more than three years before the transferor’s death.  While the proposed regulations are very specific, the restriction on the valuation approach could apply to the inheritance of most family businesses.  You can read more about the proposed rules the IRS wants to implement in the Wall Street Journal. read more

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Think Twice Before Adding Your Child to Your Bank Account

By Jason Palmisano

Adding a responsible adult child to mom’s bank account to give the child access to funds to pay bills and expenses for mom as she gets older seems harmless enough, right?  After all, mom really needs the help and the account will now avoid probate since the child is a joint owner of the account.   And mom did tell her child to divide the funds equally with his siblings after she passes (which, of course, the child assures her will happen). read more

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Estate Planning for Non-U.S. Citizens

by Matt O’Kane and Jason Palmisano

The laws governing the U.S. estate and gift tax system are complex.  For Non-U.S. Citizens, the U.S. estate and gift tax system is more onerous and requires a much higher degree of awareness.   We recently hosted a seminar discussing several issues Non-U.S. Citizens face in transferring their asset to their loved ones and providing strategies to minimize U.S. transfer taxes, including: read more

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Who should you trust to be the trustee?

By Julia L. Frey.   One of the most important decisions one can make when setting up a trust for a child or other loved one is determining who to name as the trustee.  It is a job (not a cake-walk) that requires dilegence, an understanding of the fiduciary responsibilities and an understanding of what the grantor’s intent is for distributions under the Trust.  Over the years I have seen family members or friends named as trustees who have not understood the depth of their role or were not capable.   In one case, a family came to me after a family member stole all of the trust money to feed his drug habit, leaving the beneficiaries without any recourse as he had no means to repay the stolen funds.  Corporate trustees or co-trustees are often the answer to avoid such problems.  A just read a recent article in Worth Magazine by Patrick Kenefick with Neuberger Berman that was right on point so I commend it to you for your reading.  http://worth.com/index.php?option=com_advisors&id=2005&view=single read more