ETA 2026 – Switching from Inclusion to Exclusion Planning for the Estate Tax

Currently (and since the Tax Cuts and Jobs Act of 2017), we, like many other practitioners, have seen an incredible uptick in inclusion planning[1] instead of the traditional exclusion planning (getting assets out of one’s taxable estate). A primary driving force for this major shift was the essential doubling of the estate tax exemption (from…
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Intentionally Defective Grantor Trusts – Have your cake and eat it, too

Shortly before his passing, Benjamin Franklin uttered one of his more infamous quotes, “In this world, nothing is certain except death and taxes.” With the certainty of death implicitly comes another: everyone will transfer his or her wealth, whether in life or after death. How a person transfers wealth will affect how the other certainty,…
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Is a Trust a Legal Entity? If Not, What is It?

Recently, an attorney friend of mine involved in a family legal matter concerning trust administration called to ask me what probably seemed like a simple question – is a trust a legal entity? The point of the question related to procedural aspects of trust administration, issues involving duties of the attorney involved, and related considerations.…
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Mississippi Medicaid Estate Recovery and Homestead Protection

If you’ve ever owned a home in Mississippi, you are probably familiar with the concept of homestead exemption, if for no other reason than to reduce the amount of ad valorum (property) taxes you pay each year. While filing for the homestead exemption in Mississippi does provide the benefit of reducing these taxes, its main…
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Life Settlements of Life Insurance Policies: What, When, and How

Many individuals take out life insurance policies for valid planning reasons which later are no longer needed or desirable. Alternatively, the policy owner may need current liquidity. While many policies can be surrendered for their cash value or the owner may take loans against the policy, there may be other options. One of those options…
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Threading the Needle – The Utility and Structural Requirements of ING Trusts

Estate planners and tax practitioners have been utilizing incomplete non-grantor trusts, or “ING” trusts, with increased frequency. ING trusts can be utilized for a number of reasons, including, but not limited to, federal income tax planning,[1] asset protection, planning for qualified small business stock benefits, income shifting through distributions to descendants, and others. While this…
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Chief Counsel Advice Memorandum Debunks Tax Avoidance Scheme Using Trust

In a recent Chief Counsel Advice Memorandum[1] (“CCM”), the office of the IRS Chief Counsel debunks the income taxation, or lack thereof, found in promotional materials promoting a structure known as a “Non-grantor, irrevocable, complex, discretionary, spendthrift trust”, with a note that the structure may be referred to by several other similar but slightly different…
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Do Not Be Caught Unaware – The Reporting Requirements under the Corporate Transparency Act are Approaching

The Corporate Transparency Act (“CTA”) was passed on January 1, 2021, under the Anti-Money Laundering Act of 2020. As previously written about by Josh Sage[1] and Devin Mills[2], the CTA subjects reporting companies, their beneficial owners, and the company applicant (all defined hereunder) to report certain information to the Financial Crimes Enforcement Network (“FINCEN”), or…
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When Asset Protection Planning Goes Wrong – Yegiazaryan v. Smagin

In asset protection planning, sometimes things go as planned. Other times, they go horribly wrong. The United States Supreme Court just issued its opinion in Yegiazaryan v. Smagin[1] which illustrates one situation where the debtor finds himself facing the potential treble damages due to alleged violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”).…
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Your Estate Plan and Life Insurance – A Complementing Pair

It is estimated that approximately 52% of all Americans have some form of life insurance. On the other hand, there are also estimates that only 27% percent of Americans have some form of an estate plan in place. This article provides a brief and simple overview of how the two are not mutually exclusive, and…
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