Practical Tax Strategies

There are numerous elections that fiduciaries can make on estate and trust federal income tax returns to help maximize tax efficiency for the entity and its beneficiaries. One such election is the Section 643(e)(3) election, which permits a fiduciary to treat the distribution of in-kind property as having been sold by the entity to the beneficiaries at fair market value (FMV), thereby triggering potential gain, among other consequences.

Liability Insurance: The Strongest Pillar in an Asset Protection Plan
Chicago Daily Law Bulletin

"Asset protection" has remained a hot, though oftentimes mysterious, term in the legal field for some time now. Many times, it carries with it a dirty connotation (e.g. a texting driver blows a red light doing 80mph in his Aston Martin, causing a fatal accident in Chicago, then two days later, transfers all of his assets to his brother in California as "a gift").

September 22, 2014

With the increased use of intervivos trusts, it is now less common to have ancillary administration in Illinois in estates of nonresident decedents. Attorneys representing nonresidents of the State of Illinois should counsel clients to use a revocable “living” trust for Illinois assets so the delay and expense of administration in Illinois, as an ancillary jurisdiction, will be eliminated. 

August 1, 2014
Journal of Passthrough Entities

For our clients' businesses in the partnership format, the interplay of income tax planning and estate planning will continue to present sophisticated challenges. This is particularly demonstrated by questions regarding the 3.8-percent tax on net investment income under Code Sec. 1411 (c), and whether material participation by the trustees avoids passive income for a trust that receives trade or business income from an operating partnership.

Trusts & Estates

Donor advised funds (DAFs)1 and private foundations (PFs)2 are often compared and con- trasted.  Those making the comparisons often quickly conclude that a DAF is the better choice. More and more it seems that DAFs are becoming the  reflexive recommendation of many advisors. Almost before a client describes her charitable  desires—or how large the —the advisor enthusiastically decrees, “The DAF is the right choice for you!”

Chicago Daily Law Bulletin

Many of us are familiar with the English wedding rhyme that describes what a bride should wear on her wedding day for good luck: Something old, Something new, Something borrowed, Something blue, And a silver sixpence in her shoe. As cohabitation before marriage in continues to rise, now, more than ever, a bride’s something new may be her pregnancy.

April 21, 2014
The Journal of Passthrough Entities

In 2014 and going forward, income tax planning in estate planning will be parallel in importance to estate tax planning. For estate planners, planning for the step-up in basis (until that too is repealed) is a critical step. And in the partnership context, that step becomes critical. Typically, discounts for estate tax purposes reduce the potential step-up in basis and are therefore costly from an income tax perspective. That increased income tax burden will become apparent when a partner exits from the partnership.

Trust and Estates Magazine

When spouses seek advice from their attorney in implementing an estate plan, they likely expect that their attorney will represent each of their interests.  The Model Rules of Professional Conduct (the Rules) prohibit an attorney from representing two clients if their interests are directly adverse.1 As the Bible proclaims (in a different context):  No man can serve two masters.2

February 26, 2014
Trusts and Estates Magazine

A married couple travels to their attorney’s office to sign their wills.  The husband reads his will, signs it and leaves without reading his wife’s will but assumes they are reciprocal.  The attorney then prepares a deed transferring the husband’s residence to his wife – to equalize their estates.   

February 26, 2014
Daily Law Bulletin

Cyber criminals, based overseas and concentrated in Nigeria, send scam emails to law firms on a daily basis in an effort to fraudulently extract IOLTA funds and enrich themselves.  Because of the increasing prevalence of these ventures, attorneys need to understand how such cons work and to protect themselves against fraud.

February 1, 2014