The speakers' names are omitted to encourage candor. These summaries of prior meetings are prepared for professional use assuming a broad general exposure to the practices and procedures of estate planning and the law applicable in Virginia and related disciplines. These summaries are not suitable for use as a substitute for professional advice. Professional experience is required before using these summaries as guidance. Website owned by and operated by McLean Estate Planning Council Website, LLC, for McLean Estate Planning Council, a Virginia non-stock corporation.
December 16th, 2009 was a Round Table discussion of what to do if Congress does NOT enact estate tax legislation before January 1st of 2010. The panel was three people of a large firm financial advisor, a large firm estate lawyer, and a small firm Registered Investment Advisor with thirty people in the room from all the traditional estate planning professions. The discussion continued for about an hour and a half without becoming dull. The basics of the discussion is that under current law that estates of decedents dying during the year 2010 have NO estate tax, which also means no Generation Skipping Tax. Is this the year to write very long term trusts also known as family banks or dynasty trusts? The answer is not necessarily. One of the participants asked about 2/3rds of the way through the meeting for a show of hands on expectations for what Congress is most likely to do. 80% thought the value of the estate that would be exempt from Estate Taxes (the exclusion amount) would be $3,500,000. This is just a learned observer opinion. 10% thought the exclusion amount would be $5 million. 10% thought the exclusion amount would be $1 million. One person thought the estate tax would be abolished. An unexpected development was the idea that Congress does not have to risk a Consitutional Law question on the prohibition of Ex Post Facto laws by enacting a new estate tax sometime into the new year of 2010. The expected correction (show of hands) could also be accomplished, and is likely, would be to adjust the rates on the current law which by existing case law is not an Ex Post Facto law, especially since the current law brings the Estate Tax back in 2011 with an exclusion of $1,000,000. This was a meeting worthy of edcuational credit, but there was no seminar manual available to use for an application for credit.
July 10th, 2009 included how to add the word and action of "loving" to the family of a revocable living trust.
June 24th, 2009 was a financial planner's perspective in local and small business opportunities from the Federal Stimulus Package.
May 4th, 2009 was a special event on selling a business to family members and separately to outsiders.
April 29 Most compelling estate planning opportunities today.
March 25th, 2009 was on multinational and international estate planning where the discovery was made that the clients simply wont tell the attorney gere in the United States about the real estate and other assets located or held elsewhere. Credit was granted for continuing legal education.
February 25th, 2009 was a unique perception on investing in difficult times.
January 28th, 2009 The full title is "Everything you ever wanted to know about tax developments as of early 2009. This meeting was held at a different location for a larger then expected attendence to then suffer an ice storm. Attendence was large ice storm or not. This meeting was granted Continuing Legal Education credit. The recent election shifted the balance of the parties in Congress with action expected on the estate tax sometime between this spring and this fall. The exclusion is expected to remain at $3,500,000 but no guarantees. The Federal budget is being stressed by economic developments which is expected to send committees looking for revenue.
November 19th, 2008 was on how employee benefits can be used by business owners.Trustee's with Beneficiary's in Bankruptcy
October 29th, 2008 Trustees do need to know an over view of bankruptcy, whether spendthrift clauses are enforeceable and when they are not, what a Trustee who is also a sole Beneficiary needs to disclosure on a bankruptcy questionnaire about fiduciary relationships, and when and where bankruptcy courts may invade the corpus of a Trust. This subject has a companion on self-settled trusts in other states where there is protection from creditors and how the Federal District Court in Northern Virginia might use Virginia state law to pursue assets transferred without receiving value in exchange.
September 24th, 2008 was a presentation on the nuts and bolts of what property and casualty insurance can do for trustees and beneficiaries.
On August 29th, 2008, the Washington Post had an article on the Metro Section front page about the Divine Child Foundation whose founders are friends of several McLean Estate Planning Council members. The Divine Child supports orphanges in the Republic of Georgia. The article was prompted by the recent Russian invasion of Georgia, and was read by every embassy in Washington, D.C. Six days later the Post announced that the United States was sending One Billion dollars in aid to the Republic of Georgia. Making a difference.
August 27th, 2008 Most planners are pushing most clients to put more in their Roth IRAs, but some don't, and one national authority is against it. Why was the subject of this meeting. The Roth IRA is tax free growth once the money going in has had income tax paid on the funds being used. That is usually a good thing. The controvery is that a few clients with wealth off of their personal tax return may not have as good a result as the clients with their cash flow within view of their personal tax return. Related, but technical, is putting real estate venture ownership as a non-cash contribution into a Roth IRA when the ownership has no value. That is, before the venture has funding. Under current law (expect changes), the year 2010 has a prospective unique opportunity for unlimited transfers to Roths. Have your CPA confirm this idea before using it.
July 30th, 2008 What's new and what's available as services to seniors, especially to enable staying at home. How to tell when home care makes sense and what doesn't make sense is the purpose of this meeting. When and why to care for the elderly at home.
June 25th, 2008 Reverse Mortgages are a financial device whereby the home owner receives monthly income or cash from the equity in their home. Reverse Mortgages have been changing. Approximately 90% of the Reverse Mortgages currently being newly implemented meet FHA requirements. Application has been made for CLE credits for this session.
May 28th, 2008 Qualified Terminal Interest Trusts ("QTIP") and Qualified Personal Residence Trusts ("QPRT") are trusts for the spouse with restrictions. These trusts can be useful to allow the spouse of a second marriage to remain in the house while at the same tiime protecting the adult children of a prior marriage who are to get something, someday. The word "qualified" means conforming to IRS regulations. These trusts can be beneficiary controlled, but watch the IRS regulations. Can protect the estate from some beneficiary creditors. Can be useful for a non-US spouse. By their nature of second spouse and adult children, these trusts are multiple generation planning. There are requirements to distirbute income - watch IRS regulations. CLE Credits - This session has received approval for Virginia Continuing Legal Education credit.
April 30th, 2008 Electronic notarization of electronic documents arrives in Virginia on July 1st. There is a consistent continuing problem from case law against the use of electronic documents for Wills. Clients are scanning in these documents and sending the scanned copies to their adult children. What do we do when these scanned copies are reprinted with all the correct colors from the original? Private electronic lock boxes are now available from such vendors as Digital Now. Can they be accessed on behalf of the client when at a remote hospital. A spirited debate developed on meta-data in Word and other electronic documents even if the document is finalized with the 2007 verison of Word or scrubbed and when the revisions and comments appear to have been deleted. The former language remains to be discovered in litigation. Metadata is hidden information embedded in electronic documents that can include a treasure-trove of information -- the who, what, when and where of a document, as well as previously deleted versions -- and can be readily mined with a few clicks of the mouse if the document has not been "scrubbed." One of the attendees said it may looked scrubbed but the information is usually still there out of sight until looked at with skill or other special software. A few weeks after this meeting, Lawyers Weekly USA published an electronic article on the conflicts among state bar association ethics opinions which in some cases reaching irreconcilable opposing answers. Whether a lawyer can peek at hidden "metadata" in electronic documents is an unsettled and evolving issue.
March 26th, 2008 Planning for Large Estates especially with a single large asset When a single large asset becomes too valuable, then giftng very small percentage shares to family members does not convey enough of the property to be outside of the reach of estate taxes. To convey more outside of Estate Taxes, use Rolling GRATs (grantor retained annuity trusts). Move the asset into the GRAT on an appraised value, and remove the same value as the 100% annuity payment over 2 or 3 years. Leave the appreciated value in the GRAT which is outside of estate taxs. Keep rolling the assets through additional GRATs. Although the estate tax isn't reduced by the rolling GRATs any more then it would otherwise have been reduced, such as with valuation discounts, over many years the wealth delivered to the family is substantially increased. If cash is included in the transfer to the GRAT, the cash can be used to buy life insurance with the GRAT as the original policy owner which would keep the life insurance policy out of the estate for estate tax purposes.
February 27th, 2008 The full title is Everything You Ever Wanted To Know About Tax Developments But Didn't Know Who To Ask In General A third or more of the Congressional committees will be replaced this 2008 election at the loss of extensive tax education in the Committees. Several pending bills could be seriously altered. IRS senior managers in local region staying on past retirement for lack of replacements.
Income Tax AMT patch was only for one year. If not patched again, the number of AMT filers will sky rocket from 3mm to 30mm for estimated additional revenue to the Federal government of $1.3 trillion. Recently enacted rebate isn’t a rebate. It’s a credit against 2008 taxes with an advanced check. Several planning opportunities for filing separately or with senior teenagers or young adults. Section 179 raised to $200,000
Estate Tax 52 bills pending in Congress, but only 4 are deemed serious. Those 4 have the following common features: 5mm exclusion is most likely to be enacted in 2009 Abolishing the GST is included in the legislative bills but repeal isn't expected. Crummey letter likely to be abolished (get any ILITs this year) Of the 318 IRS agents in the Cleveland office that review Estate Tax Returns, fully one-third are retiring this year or next, and Congress doesn’t want to fund the replacement training. IRS has adopted a policy that Valuation Discount will not be allowed for investment portfolio and other liquid holdings.
CLE Credits - This session has received approval for Virginia Continuing Legal Education credit.
January 23rd, 2008 Irrevocable Life Insurance Trusts Using an ILIT as a Long Term Trust (Dynasty Trusts; Family Banks) within the current case law and regulations. Funding options such as Crummey Letter gifting and reverse split dollar. Selection and supervision of Trustees.
November 28th, 2007 Long Term Care Advising on long term care planning and insurance. Are the clients taking advantage of all Federal and State tax incentives? How does Virginia, Maryland and DC differ on these issues? How are the employees and owners of C-Corps and S-Corps taxed if long term care insurance is paid by the business?
September 27, 2007 Asset Allocations Are the process of reducing risk and maintaining income, which with the recent mortgage related chaos is a pressing issue. There are several factors in Asset Allocation, of which three are worth listing here: Investment Horizon Risk Tolerance Overall Financial Profile
February 28, 2007 Tax Update Lengthy list of IRS forms that are out of date. The IRS study of Sub-S Corporations and Partnerships is nearly complete. The IRS is commencing a study of Schedule C filers. The chance of an audit for Sch C with $100,000 or more in gross receipts has increased from 1 in 18 to 1 in 6 or so (maybe 1 in 8). Charitable Contributions must be made by check or truly thoroughly documented. The Service and Congress are embarrassed by a particular taxpayer's deduction which is being used to justify a stricter view. Cash donations at church on Sunday must now have a detailed letter from a church official. Other subjects later removed from this summary as no longer applicable.
January, 2005 The Mentally Alert But Physically Failing Client The speaker was an Investment Advisor on lessons learned from her own father who was mentally alert and of good hearing, but because he appeared and was frail, but talking loud was not needed and annoying. A new idea came from this speech of give clients an additional copy of their Power of Attorney and a red file folder to keep it in. The red folder is to go on the refrigerator or bed room door where the Emergency Medical Technicians ("EMT"s) are looking for Do Not Resuscitate ("DNR") orders. Also put in the red folder the latest medical information. An additional use is where the attorney in fact can find the financial information.
March 4, 2001 Planned Giving Effective gift planning is based on the families prior history of gift giving. Typical families make gifts to only one or two kinds of charities.
September 5, 2001 Use of LLCs In Lieu Of Trusts LLCs may be used in lieu of Trusts as both a single member LLC and Trusts can be arranged to be "disregarded entities" for Federal income tax purposes. Trusts confirming to Internal Revenue Code 671 through 677 are Grantor Trusts where all Trust income and expenses remain on the Grantor's (creator's) personal income tax return. Single member LLCs default to disregarded entities and may check the box on the IRS entity classification form. During this meeting a member in a debate said the three words of "committee of beneficiaries" that changed forever how families can administer Long Term Trusts which are also known as Dynasty Trusts and Family Banks.
October 5, 2000 Revocable Living Trusts Revocable Trusts are commonly called Living Trusts, Grantor Trusts, and for married couples By-Pass Trusts. Trusts in Virginia are essentially creatures of the common law (changed July 1, 2006, with the adoption of the Virginia version of the Uniform Trust Acts Code [UTA]). A pour over Will (Last Will and Testament) moves the assets in probate into the trust for non-probate administration and distribution. Trusts are used to avoid probate costs, double the value of estates of married couples that pass free of estate taxes, for greater privacy, and provide flexibility that is very hard to achieve in a probate administation. Before the UTA, trusts generally escaped the claims from the decedent's creditors. Trusts can be quite simple to very complex. Do not use trusts where supervision in probate is necessary or useful, such as when the siblings are not compatible.