Year-end Planning With a Spousal Lifetime Access Trust (“slat”): Five Key Points to Consider
The Tax Cuts and Jobs Act of 2017 doubled the federal gift and estate tax applicable exclusion amount from $5 million to $10 million, adjusted for inflation. In 2021, the federal gift and estate tax exemption is set at $11.7 million, which generally means that an individual can transfer $11.7 million worth of assets...
Make Sure Taxes Are Paid Before Final Distribution to Beneficiaries
A recent (unpublished) federal district court case out of New Jersey, decided on October 22, 2020, United States v. Estate of Kelley, 2020 WL 6194040, highlights the treacherous pitfalls to which an inexperienced estate representative may be exposed when assets are distributed to beneficiaries before Uncle Sam collects his taxes.
FACTS
Lorraine...
Transfer to Transferee Ira Not Taxable
In a recent Private Letter Ruling dated September 25, 2020 (PLR #202039002), IRS determined that a transfer to a transferee IRA is not a taxable distribution and that distributions to the beneficiaries of that IRA are not includible in the gross income of the decedent's estate.
FACTS
A decedent who...
Trusts Cannot Assert Fifth Amendment Right Against Self-incrimination
In a recent tax case involving IRS subpoenas, United States v. Fridman (2d Cir. 2020) 974 F.3d 163, a federal appellate court ruled that a trust cannot assert a right against self-incrimination under the Fifth Amendment to the United States Constitution.
FACTS
As part of its investigation into the business dealings of...
Considerations for Forming an Llc for Holding Real Estate
For individuals who own real estate, it is important to consider the best way to structure your ownership. When you are just starting out as an investor in real estate, you may hold title to the real estate personally, but that may not be the most advantageous method of ownership. Another option...
Risky Business: Piercing the Veil and How It Puts Your Business at Risk
When you create a limited liability company (LLC) or a corporation, the concept of limited liability is one of the key rationales for those entity choices. Limited liability is typically available when you create distinct legal entities that separate your personal assets from your business assets, thereby limiting exposure to liability on...
Increase in Creditor Exemption for Ca Homeowners
On September 18, 2020, Governor Newsom signed into law Assembly Bill 1885, Section 1 of which increases the homestead exemption against creditors with respect to a debtor's equity in his or her personal residence. Specifically, the new law amends Code of Civil Procedure §704.730, effective January 1, 2021, replacing California's current and...
Five Types of Risk That Businesses Face
Pursuing a business venture naturally involves risk. Eliminating all risk is not an option—there are many factors beyond your control, and it is impossible to prevent every circumstance that might deviate from your plans. Nevertheless, you can decrease the degree of risk to which your business is exposed by identifying risks and...
How Does Llc Ownership Work?
The limited liability company (LLC) is a popular business structure for new businesses, but what does it really mean to own an LLC? LLCs provide unique opportunities to customize business ownership to fit the particular needs and circumstances of the owners. Here is what you should know about LLC ownership.
What Happens to an Llc After a Member Dies?
Death is almost always a complicated event for the survivors, who have not only emotional but also logistical considerations to manage. However, when an owner (typically called a member) of a limited liability company (LLC) dies, it exacerbates the difficulties for the surviving members. In addition to bearing the loss, they must...