Archives: Estate Planning

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Beware: Active Participation of S-Corporation Trustee Shareholder is Required – Technical Advice Memorandum 201317010

Differing points of view have arisen regarding determining the active participation of S-Corporation shareholdings held in Trust.  The uncertainty centers on IRC § 469. Section 469 defines a passive activity as any activity that involves the conduct of any trade or business in which the taxpayer does not materially participate, and the section specifically includes … Continue Reading

Planning for Carried Interests & Avoiding Section 2701

Alternative investments in private equity and hedge funds have gained in popularity over the last two decades and have become a regular allocation of many investment portfolios. During this period, significant wealth has been generated and continues to be generated by the fund managers. There are some unique opportunities available to these fund managers and … Continue Reading

U.S. Supreme Court Rules DOMA Unconstitutional in Estate Tax Case

The Supreme Court has held that the Defense of Marriage Act (“DOMA”) is unconstitutional.  DOMA defined “marriage” and “spouse” to the exclusion of same-sex partners for purposes of federal law.  As a result, same-sex partners (even those legally married or otherwise legitimized under state law) were not considered married or to be spouses for purposes … Continue Reading

The Proliferation of Trust Decanting Statutes Continues

Irrevocable trusts are now subject to varying degrees of amendment by court approved modifications, trust protector actions, private settlement agreements, and, of course, decanting.  Effective July 1, 2013, Wyoming will become the nineteenth state (and the ninth state since 2010) to permit trust decanting by statute.  Decanting refers to the distribution of trust property of … Continue Reading

Estate Planning Documents of Married Clients Should Be Reviewed

Authored by: Bob Brucken (Retired Partner) Estate plans for married clients typically provide first for the surviving spouse, in a manner that avoids estate tax at the first spouse’s death and minimizes that tax at the second spouse’s death.  This is often accomplished by including technical and often lengthy “marital deduction formula clauses” in the … Continue Reading
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