Recently, U.S. District Court Judge Robert Gettleman sentenced TV pitchman Kevin Trudeau to 30 days in jail and fined him $5,000 for direct criminal contempt. Trudeau was found to have bombarded the judge's e-mail account with messages from supporters. The 7th Circuit is considering Trudeau’s appeal and specifically: the nature of Trudeau’s “speech”, whether Judge Gettleman exceeded his authority and whether Trudeau’s actions that resulted in a barrage of 300 emails to the judge’s blackberry should be considered “criminal.” These questions provide a backdrop to discuss the fundamental concept of contempt – civil and criminal – and the circumstances where such findings could be appropriate.
Somewhere in a bleak house in Washington, D.C. a plot exists. The conspirators are working against a favorite planning tool, the grantor retailed annuity trust (GRAT). Bill after bill has been born to limit the flexibility and power of the GRAT. The authors of these legislative works have great expectations to oppress this popular idea.
0ne of the more important appellate court valuation cases was handed down in late spring by the Eighth Circuit, T.H. Holman. In this month's column, we analyze the reasoning and how it applies to the structuring of family Iimited partnerships.
A family limited partnership (FLP) and a family limited liability company (FLLC) are two entity choices frequently used by estate planners to achieve federal estate tax (“estate tax”) savings. While many considerations impact the choice of a FLP versus a FLLC,5 one factor that probably escapes consideration by many practitioners is the impact of the passive activity loss (PAL) rules for Federal income tax (“income tax”) purposes on that choice.
One of the least discussed and reasoned decisions in entity planning for discount purposes is whether to use a limited liability company (LLC) format or that of the family limited partnership (FLP). On the surface, as an LLC is taxed as a partnership under the Internal Revenue Code,1 practitioners often conclude that there should be no difference.
This month, the column discusses the estate tax strategies for which the grantor trust planning should be considered, including lifetime use of the applicable credit amount, the qualified personal residence trust (QPRT), postmortem use of grantor trusts in the credit shelter trust context, grantor retained annuity trusts (GRATs), and sales to a grantor trust.
Many clients believe that the greatest enemy to their wealth is the federal estate tax. The reality is that very few estates actually pay a federal estate tax and current estimates are that fewer than 20,000 estates annually will actually pay the federal estate tax.
One of the most popular passthrough entities used by sophisticated estate planners is the irrevocable grantor trust, set up during the grantor’s lifetime. The importance of the grantor trust for estate planning purposes has been highlighted by the recent revenue ruling, 2008-22.