What are the rights of a creditor to LLC interests to satisfy their claim? That question was at issue in a recent opinion from the Alabama Supreme Court.[1] In that case, the creditor received a “charging order” (discussed below) requiring that distributions from the LLC made to the debtor be instead transferred to the clerk…
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Under current law, the unified credit against estate and gift tax sits at $10,000,000, subject to indexing for inflation (the “Exemption”).[1] As a result of the Tax Cut and Jobs Act, this number increased from $5,000,000 effective January 1, 2018 and through December 31, 2025, with the number set to drop back down to $5,000,000on…
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The U.S. Treasury recently issued its “Green Book”[1] which includes, among other items, a proposed increase in the capital gains rate up to 43.4%[2] for taxpayers with incomes over $1 million as well as an elimination of like-kind exchanges where gain deferral will exceed $500,000. This means that taxpayers will be subject to significantly higher…
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In trust planning, it is common that a trust beneficiary is appointed as trustee. A lot of confusion surrounds the consequences of appointing a beneficiary as his or her own trustee. On one hand, I have heard people say it is not allowed to have a beneficiary serve as trustee. On the other hand, I…
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As a basic matter, creditors of a trust beneficiary generally do not have access to assets of the trust.[1] The primary exception is that creditors generally can access trust assets distributable to the settlor of the trust, such a trust being considered “self-settled.”[2] Many states have abolished this exception for trusts that satisfy certain statutory…
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The Mississippi Legislature made some sweeping changes to Mississippi laws governing estates and trusts, as well as one significant change to real property law. With the passage of S.B. 2850 and S.B. 2851, Mississippi is set to get some much needed updates in these areas of law. Both bills were signed by the governor and…
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Those of us who handle acquisition transactions can take for granted that asset acquisitions avoid the buyer assuming unintended liabilities of the seller. As a general rule, acquisitions of an entity’s equity cause the buyer to take any liabilities of the business conducted by the entity. However, asset acquisitions generally allow the buyer to selectively…
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Introduction Earl and Margaret Blasingame filed bankruptcy seeking the discharge of over $7.7 million in debt. They claimed to have monthly income below $900 and total assets of less than $6,000. However, Earl and Margaret lived in a “28-acre gated compound” with a heated swimming pool and lighted tennis courts. The residence was adjoined by thousands…
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The income taxation of life insurance death benefits seems fairly simple initially. Many people know the general rule that death benefits are not subject to income tax. However, there are exceptions that can apply which will cause the beneficiary to owe income tax on the receipt of death benefits. This article describes certain of these…
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A couple of recent cases illustrate situations where moving assets from one state to another may have the effect of shielding those assets from creditors. In both of the cases, judgment debtors moved assets to another state and succeeded in avoiding enforcement of the judgment. In re Cleopatra Cameron Gift Trust, a California Judgment Against…
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