Heckerling
Institute 2003
Reports from the event, as posted to the ABA-PTL List Serve |
Introduction
back
to 2003 Table of Contents
INTRODUCTION
As we have done in January for the last six years, and again with
the
permission of the University of Miami School of Law Center for Continuing
Legal Education, we will be posting to this list throughout the
coming week
highlights of the proceedings of the 37th Annual Philip E. Heckerling
Institute on Estate Planning that is being held January 6-10, 2003
at the
Fontainebleau Hilton Resort and Towers in Miami Beach, Florida.
Our on-site local reporters there in Miami this year will be identified
as
their reports are received and published:
We also will be posting the full text of this year's Reports on
the ABA
RPPT Section's Web site, as we have since the 2000 Institute. Those
Reports can be found at URL
http://www.abanet.org/rppt/meetings_cle/heckerling/home.html. In
addition,
each Report can also be accessed at any time from the ABA-PTL Discussion
List's Web-based Archive at URL http://mail.abanet.org/archives/aba-ptl.html.
=================================================
Again this year a complete listing of the proceedings and speakers
is
available on the Institute's Web site. The URL for that site is
http://www.law.miami.edu/heckerling. For those of you without access
to the
Web, here are the core parts of the schedule:
Scope of the Institute:
The Philip E. Heckerling Institute on Estate Planning is the nation’s
leading conference for estate planning professionals. It is designed
for
sophisticated attorneys, trust officers, accountants, insurance
professionals, and financial planners who, through years of experience
and
practice, are familiar with the principles of estate planning. This
year’s
program will provide the information you need to remain up-to-date
on the
latest developments in the estate planning field.
· A recent developments panel on Monday afternoon will guide
you
through the year’s developments in estate, gift, and income
taxation.
· The Tuesday morning program marks the beginning of our
general
session lectures. The lectures provide in-depth analysis of topics
of
timely interest to experienced estate planners, and are presented
by some
of the nation’s leading authorities.
· Tuesday afternoon will include a panel focusing on estate,
gift and
generation-skipping planning and drafting issues in the new statutory
environment.
· On Wednesday and Thursday afternoons, the Institute offers
a wide
variety of workshops, panel discussions, and case studies, that
will
examine and provide practical guidance on sophisticated estate planning
techniques.
· Finally, this year’s Institute once again includes
our popular
Fundamentals Program, designed to be of interest to not only entry-level
practitioners, but also to more experienced planners who would benefit
from
a thorough review of these topics central to the estate planning
process.
As the largest gathering of estate planners in the country, the
Institute
offers a unique opportunity to exchange ideas, to network, and to
review
the latest in technology, products and services displayed by over
100
vendors in an exhibit hall dedicated entirely to the estate planning
industry. We hope that you will join us in Miami Beach January 6-10,
2003,
to take advantage of this unique event.
THE INSTITUTE 2003 FACULTY:
Roy M. Adams
Sonnenschein Nath & Rosenthal
Steve R. Akers
Bessemer Trust
Russell G. Allen
JP Morgan
Albert S. Barr, III
Law Office of Albert S. Barr, III LLC
Susan T. Bart
Sidley Austin Brown & Wood
Martin E. Basson
Internal Revenue Service Estate and Gift
Edward Jay Beckwith
Baker & Hostetler LLP
Norman J. Benford
Greenberg Traurig
Jonathan G. Blattmachr
Milbank, Tweed, Hadley & McCloy LLP
Alexander A. Bove, Jr.
Law Offices of Alexander A. Bove
Karen E. Boxx
University of Washington
Lawrence Brody
Bryan Cave LLP
J. Donald Cairns
Spieth, Bell, McCurdy & Newell, L.P.A.
Natalie B. Choate
Bingham Dana LLP
Richard B. Covey
Carter, Ledyard & Milburn
David J. Dietrich
Dietrich & Cole
S. Stacy Eastland
Goldman, Sachs & Co.
Mary Lou Edelstein
Internal Revenue Service Appeals
Timothy P. Flaherty
Silver Creek SV, LLC
Paul N. Frimmer
Irell & Manela LLP
Jon J. Gallo
Greenberg, Glusker, Fields, Claman
Machtinger & Kinsella LLP
Leslie C. Giordani
Giordani, Schurig, Beckett & Tackett, LLP
Joseph G. Gorman, Jr.
Sheppard, Mullin, Richter & Hampton LLP
Carol A. Harrington
McDermott, Will & Emery
Ellen K. Harrison
Shaw Pittman
Dan T. Hastings
Skadden, Arps, Slate, Meagher & Flom LLP
Joseph G. Hodges, Jr.
Attorney at Law
Edmond M. Ianni
Wilmington Trust Company
Lawrence P. Katzenstein
Thompson Coburn LLP
William Lapiana
New York Law School
John B. Lawson
Insurance Distributors International (Bermuda) Ltd.
Ralph E. Lerner
Sidley Austin Brown & Wood LLP
Mary Ann Mancini
Steptoe & Johnson LLP
Daniel H. Markstein, III
Maynard, Cooper & Gale, P.C.
Carlyn S. McCaffrey
Weil, Gotshal & Manges LLP
Jerry J. McCoy
Law Office of Jerry J. McCoy
Judith M. McCue
McDermott, Will & Emery
Louis A. Mezzullo
Mezzullo & Guare, PLC
John R. Price
Perkins Coie LLP
John W. Porter
Baker & Botts, L.L.P.
Susan Porter
United States Trust Company
Richard B. Robinson
Lentz, Evans & King P.C.
Pam H. Schneider
Gadsden Schneider & Woodward LLP
Howard M. Zaritsky
Attorney at Law
Henry Steinway Ziegler
Fiduciary Trust Company International
THE PROGRAM SCHEDULE:
Sunday, January 5
Registration
Monday, January 6
OPTIONAL PRE-CONFERENCE FUNDAMENTALS PROGRAM
ERISA for Estate Planners - Natalie B. Choate
Introductory Remarks - Tina Portuondo, Institute Director
Recent Developments in Estate, Gift and Income Taxation 2002
Carlyn S. McCaffrey
Dan T. Hastings
Howard M. Zaritsky
Materials by Richard B. Covey and Dan T. Hastings
Tuesday, January 7
Adventures in Life Insurance! (And You Thought It Would Be Boring)
Jonathan G. Blattmachr
Turning the Tables: When Do the IRS Actuarial Tables Not Apply?
Lawrence P. Katzenstein
What To Do With Art and Other Valuable Stuff
Ralph E. Lerner
Charitable Lead Trusts Re-Examined: The Dawning of a Golden Age?
Edward Jay Beckwith
Drafting After EGTRRA (and Other Recent Developments):
How Different Is It?
Pam H. Schneider
Paul M. Frimmer
Carol A. Harrington
Did They Get It Right? The Final Minimum Distribution Rules
Louis A. Mezzullo
State Law Developments Searching for Revenue and Other Quests
William Lapiana
Wednesday, January 8
Worth the Effort Even Beyond the Grave An Update of Post-Mortem
Planning Issues
Steve R. Akers
From the Far Bank of The River Styx: Post-Mortem Problems and
Opportunities With Family Partnerships
Daniel H. Markstein, III
Question & Answer Session
Carlyn S. McCaffrey
Dan T. Hastings
Howard M. Zaritsky
FUNDAMENTALS PROGRAM Estate Planning in a Low Interest
Rate Environment (Runs concurrently with the Special Sessions)
Lawrence P. Katzenstein
Special Sessions I
I-A CASE STUDY The 529 Drop-Kick Through the Financial
Goalposts of Education Savings
Susan T. Bart
I-B Our Best Ideas That We Are Willing To Talk About
S. Stacy Eastland
Jonathan G. Blattmachr
Ellen K. Harrison
I-C Charitable Planning: What’s on Your Desk?
Jerry J. McCoy
Edward Jay Beckwith
Ralph E. Lerner
I-D Fielding the Throwback and Other Considerations for NRAs
With U.S. Heirs
Henry Steinway Zeigler
I-E Ethics as Part of the Daily Mix Has Enron Raised the Bar?
Joseph G. Gorman, Jr.
J. Donald Cairns
Judith W. McCue
Special Sessions II
II-A CASE STUDY Moving the Immovable Protecting Real
Estate From Creditors
Alexander A. Bove, Jr.
II-B Transfer Tax Audit Issues: What's Hot, What's Not
Norman J. Benford Mary Lou Edelstein
Martin E. Basson John W. Porter
II-C Advanced Investments in Life Insurance Strategies Use of
Hedge Funds in Offshore Private Placement Life Insurance
Lawrence Brody
Leslie C. Giordani
Timothy P. Flaherty
John B. Lawsond
II-D Back to the Future: Carryover Basis in 2010
William Lapiana
Susan Porter
II-E Ethics as Part of the Daily Mix Has Enron Raised the Bar?
(Repeat of Session I-E)
Joseph G. Gorman, Jr.
J. Donald Cairns
Judith W. McCue
Thursday, January 9
Estate Planning With GRATs and Near-GRATs Opportunities and
Pitfalls of a Cloudy Crystal Ball
John R. Price
Unwinding the Discount Entity: What Happens When the Family
Wants To Take Their Share and Run?
Richard B. Robinson
What Do You Mean, Subpoena? I’m a Lawyer!
Russell G. Allen
One Percent, Two Percent, Three Percent, Four No Matter What
12:15 p.m. You Pay, the Bene Wants More
Susan Porter
FUNDAMENTALS PROGRAM Everything You Ever Wanted To
Know About Generation-Skipping But Were Afraid To Ask
(Runs concurrently with the Special Sessions)
Jon J. Gallo
Special Sessions III
III-A CASE STUDY Unwinding Discount Entities
Richard B. Robinson
III-B Transfer Tax Audit Issues: What's Hot, What's Not
(Repeat of Session II-B)
Norman J. Benford
Mary Lou Edelstein
Martin E. Basson
John W. Porter
III-C Post-Mortem Planning in Transition
Steve R. Akers
III-D Fiduciary Firewalls: A Look at Blind Trusts
Edmond M. Ianni
III-E Timely Tech Topics & Ticklers "Must Have" Software,
"Must Know" Technology, and "Must Do" Stuff
Joseph G. Hodges, Jr.
Albert S. Barr, III
Special Sessions IV
IV-A CASE STUDY Post-Mortem Planning With Partnerships
Daniel H. Markstein, III
IV-B GRATs
John R. Price
IV-C The FLP Side: Fiduciary Liability Potential
Russell G. Allen
Susan Porter
IV-D Pleasing Mother Earth and the IRS: Using Conservation
Easements To Save Open Space, Income and Estate Taxes
David J. Dietrich
IV-E Split-Dollar Life Insurance
Lawrence Brody
Jonathan G. Blattmachr
Mary Ann Mancini
Friday, January 10
The Durable Power of Attorney: Why You Should Give More
Attention to Estate Planning’s Stepchild
Karen E. Boxx
Terrorism or Its Prospect The Impact on Estate Planning
Roy M. Adams
CASE STUDY Wrapping It Up Applying What We Have Learned
Louis A. Mezzullo
__________________________________________
GENERAL INFORMATION:
Inquiries/Registration:
Philip E. Heckerling Institute on Estate Planning
University of Miami School of Law
Center for Continuing Legal Education
P.O. Box 248087
Coral Gables, FL 33124-8087
Telephone: 305-284-4762 / FAX: 305-284-6752
Web site: www.law.miami.edu/heckerling
E-mail: heckerling@law.miami.edu
===========================================
Headquarters Hotel - Fontainebleau Hilton
4441 Collins Avenue
Miami Beach, FL 33140
Telephone (305) 538-2000, FAX (305) 674-4607
==================================================
NOTICE: Although audio tapes of all of the substantive session
at the Miami Institute currently are only made available to Institute
registrants for purchase, the entire proceeding of the Institute
are
published annually by Lexis/Nexis. For further information, go to
their Web site at http://www.lexisnexis.com/productsandservices.
The text of these proceedings is also available on CD ROM from
Authority On-Demand by LexisNexis Matthew Bender. For further
information, contact your sales representative, or call (800) 833-
9844, or fax (518) 487-3584, or go to http://www.bender.com,
or write to Matthew Bender & Co., Inc., Attn: Order Fulfillment
Dept.,
1275 Broadway, Albany, NY 12204.
______________________________________________________
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back
to 2003 Table of Contents
PROGRAM
back
to 2003 Table of Contents
This e-mail includes the program and the summaries
from the 37th Annual Heckerling Institute on Estate
Planning.
As we have done in January for the last six years, and
again with the permission of the University of Miami
School of Law Center for Continuing Legal Education,
we will be posting to this list throughout the coming
week highlights of the proceedings of the 37th Annual
Philip E. Heckerling Institute on Estate Planning that
is being held January 6-10, 2003 at the Fontainebleau
Hilton Resort and Towers in Miami Beach, Florida.
We also will be posting the full text of this year's
Reports on the ABA RPPT Section's Web site, as we have
since the 2000 Institute. Those Reports can be
found at URL http://www.abanet.org/rppt/meetings_cle/heckerling/home.html.
In addition, each Report can also be accessed at any
time from the ABA-PTL Discussion List's Web-based Archive
at URL http://mail.abanet.org/archives/aba-ptl.html.
A complete listing of the proceedings and speakers is
available on the Institute's Web site.
The URL for that site is http://www.law.miami.edu/heckerling.
===================================================
37TH
ANNUAL
HECKERLING
INSTITUTE
ON ESTATE
PLANNING
Sunday, January 5
12:00 Registration
6:00 p.m.
Monday, January 6
8:00 a.m. Registration
8:00 Complimentary Continental Breakfast
9:00 a.m.
9:00 OPTIONAL PRE-CONFERENCE FUNDAMENTALS PROGRAM
10:30 a.m. / ERISA for Estate Planners
10:45 a.m.
12:15 p.m. Natalie B. Choate
Everything you need to know about estate
planning for qualified retirement
benefits except the minimum distribution rules: the
types of retirement plans
(defined benefit, Keogh, 401(k), ESOPs), and implications
of each for your
clients estate plan. Navigating the sea of plan administration:
information you
need to know and how to get it, spousal rights under
federal law, prohibited
transactions, plan-owned life insurance, contrast between
qualified plans and
IRAs (and which one is better for whom: the "Rollover
Roadmap"). Special
income tax deals for certain people dont let your
client miss out. Estate tax
issues: the latest on valuation and available discounts.
Disclaimers: be sure
you know what youre doing when you adopt a "disclaimer
plan" for retirement
benefits. With forms, case studies, and specific planning
ideas.
10:30 Break
10:45 a.m.
2:00 Introductory Remarks
2:10 p.m.
Tina Portuondo, Institute Director
2:10 Recent Developments in Estate, Gift and
Income Taxation 2002
3:30 p.m. Part One
Carlyn S. McCaffrey
Dan T. Hastings
Howard M. Zaritsky
Materials by Richard B. Covey and Dan T. Hastings
3:30 Break
3:45 p.m.
3:45 Recent Developments in Estate, Gift and Income
Taxation 2002
5:15 p.m. Part Two
6:00 Complimentary Reception for Registrants
7:00 p.m.
Tuesday, January 7
8:00 Complimentary Continental Breakfast
9:00 a.m.
9:00 A d v e n t u res in Life Insurance! (And You
Thought It Would Be Boring)
9:45 a.m.
Jonathan G. Blattmachr
This presentation will cover how to
obtain income tax "deductions" for term
premiums paid, how to avoid GST tax for a life insurance
trust without using
GST tax exemption, how to double the power of Crummey
withdrawal rights,
and how to plan with split-dollar life insurance.
9:45 Turning the Tables: When Do the IRS
Actuarial Tables Not Apply?
10:30 a.m.
Lawrence P. Katzenstein
This presentation will examine when
departures from the IRS actuarial tables are
permitted or required, including situations of under-productive
property and
increased risk of mortality, and will consider the implications
of recent decisions
permitting departures from the tables in valuing the
right to receive state lottery
payments.
10:30 Break
10:45 a.m.
10:45 What To Do With Art and Other Valuable Stuff
11:30 a.m.
Ralph E. Lerner
When a client owns valuable collectibles
it can require unique planning
techniques to save taxes. This presentation will address
income tax, gift tax,
and estate tax planning for collectibles, valuation
issues, IRS guidelines and
procedures, and the complications caused by a clients
emotional attachment to
his or her "stuff"!
11:30 a.m. Charitable Lead Trusts Re-Examined:
The Dawning of a Golden
12:15 p.m. Age?
Edward Jay Beckwith
In light of recent changes, both in
tax laws and the financial markets, it is likely
the charitable lead trust will become even more popular
over the balance of this
decade. This session will examine the factors contributing
to this likely trend as
well as the more creative uses and abuses of charitable
lead trusts.
12:15 Lunch Break
2:00 p.m.
2:00 Drafting After EGTRRA (and Other Recent Developments):
3:30 p.m. How Different Is It?
Pam H. Schneider
Paul M. Frimmer
Carol A. Harrington
The panelists will discuss how the
language in their documents has changed (or
not changed, as the case may be) in light of the purported
"repeal of the death
tax," technical GST tax changes included in EGTRRA,
and other recent
developments. The focus will be on specific will and
trust provisions.
3:30 Break
3:45 p.m.
3:45 Did They Get It Right? The Final Minimum Distribution
Rules
4:30 p.m.
Louis A. Mezzullo
A discussion of the final regulations
dealing with required minimum distributions,
including planning issues and problem areas.
Tuesday, January 7 (continued)
6
4:30 State Law Developments Searching
for Revenue and Other
5:15 p.m. Quests
William Lapiana
This program will discuss recent developments
in state law, both decisional and
legislative, with a special emphasis on state responses
to the elimination of the
federal state death tax credit. If time permits, mention
will also be made of
non-tax developments.
Wednesday, January 8
8:00 Complimentary Continental Breakfast
9:00 a.m.
9:00 Worth the Effort Even Beyond the Grave An Update
of Post-Mortem
9:45 a.m. Planning Issues
Steve R. Akers
The extremely broad range of post-mortem
planning strategies can be daunting.
A good planner must be knowledgeable of a wide array
of individual and
fiduciary income tax, gift tax, estate tax, and GSTT
planning traps and strategies.
This session will address important planning issues
and current developments.
9:45 From the Far Bank of The River Styx:
Post-Mortem Problems and
10:30 a.m. Opportunities With Family Partnerships
Daniel H. Markstein, III
This presentation will focus on planning
for the payment of estate tax, funding
charitable and other bequests, and dealing with existing
and newly created
partnerships after the death of the propertied spouse.
10:30 Break
10:45 a.m.
10:45 a.m. Question & Answer Session
12:15 p.m.
Carlyn S. McCaffrey
Dan T. Hastings
Howard M. Zaritsky
12:15 Lunch Break
2:00 p.m.
2:00 FUNDAMENTALS PROGRAM Estate Planning
in a Low Interest
3:30 p.m. / Rate Environment (Runs concurrently
with the Special Sessions)
3:45
5:15 p.m. Lawrence P. Katzenstein
What estate planning techniques work
best when interest rates are low? What
techniques work better when interest rates are high?
What techniques are
unaffected by interest rates? This program will examine
these questions and
look at the effect of varying interest rates on a variety
of estate planning
techniques.
2:00 Special Sessions I
3:30 p.m.
I-A CASE STUDY The 529 Drop-Kick Through
the Financial
Goalposts of Education Savings
Susan T. Bart
Learn how to create a game plan for
education savings by combining 529
savings accounts with other techniques from your playbook
and how to
Tuesday, January 7 (continued)
7
implement a successful 529 play by selecting the right
state program, using
trusts and other entities as account owners, and coordinating
the estate plan.
I-B Our Best Ideas That We Are Willing To
Talk About
S. Stacy Eastland
Jonathan G. Blattmachr
Ellen K. Harrison
The panelists will discuss their best
ideas with respect to estate planning,
charitable planning, insurance planning, option planning,
and post-mortem
planning.
I-C Charitable Planning: Whats on Your
Desk?
Jerry J. McCoy
Edward Jay Beckwith
Ralph E. Lerner
This charitable "Hot Topics"
session will review recent developments and
discuss questions previously submitted by attendees.
Registrants will be
invited to submit noteworthy planning problems in advance
of the session.
I-D Fielding the Throwback and Other Considerations
for NRAs
With U.S. Heirs
Henry Steinway Zeigler
An increasing number of high net worth
non-U.S. families have at least one child
who is a U.S. taxpayer. This presentation will address
some of the opportunities
and pitfalls for multinational families with U.S. heirs,
with emphasis on foreign vs.
domestic trusts and entities and how to save U.S. taxes
for the heirs after the
death of the nonresident alien parent.
I-E Ethics as Part of the Daily Mix Has
Enron Raised the Bar?
Joseph G. Gorman, Jr.
J. Donald Cairns
Judith W. McCue
A discussion of many situations that
arise regularly in an estate planners
practice, with a focus on what, from a practical viewpoint,
should be done, and
how to do it.
3:30 Break
3:45 p.m.
3:45 Special Sessions II
5:15 p.m.
II-A CASE STUDY Moving the Immovable Protecting
Real
Estate From Creditors
Alexander A. Bove, Jr.
A discussion and case study illustrating
creative solutions to the perennial
dilemma faced by estate and asset protection planners:
How to protect
investment real estate from creditors without losing
the benefits of ownership for
the client and her family.
II-B Transfer Tax Audit Issues: What's Hot,
What's Not
Norman J. Benford Mary Lou Edelstein
Martin E. Basson John W. Porter
This panel, representing the views
of the practitioner and Internal Revenue
Service, will take a practical approach to the discussion
of significant current
issues in estate, gift, and generation-skipping tax
audits, including valuation
matters (discounts, present interest qualification,
built-in gain, impact of
post-death events, use of appraisers, adequate disclosure
rules, and defined
Wednesday, January 8 (continued)
8
value issues); procedural considerations (tips for effective
appellate practice,
fast track mediation, burden of proof issues); and Graegin
notes and other
deduction issues.
II-C Advanced Investments in Life Insurance
Strategies Use of
Hedge Funds in Offshore Private Placement Life Insurance
Lawrence Brody Leslie C. Giordani
Timothy P. Flaherty John B. Lawson
This panel will discuss the use of
hedge funds in private placement variable life
insurance policies, issued by non-U.S. based insurance
carriers. The panel will
discuss attributes of hedge funds and why they and other
tax inefficient
investments may make sense in a variable life policy,
the U.S. tax considerations
of variable life insurance, including diversification
and investor control issues,
the advantages and disadvantages of private placement
life insurance, the
advantages and disadvantages of private placement variable
life insurance
offered by non-U.S. insurance carriers, and the special
issues involved in the
purchase by U.S. persons of policies issued by foreign
carriers.
II-D Back to the Future: Carryover Basis
in 2010
William Lapiana
Susan Porter
This program will discuss the carryover
basis provision scheduled to come into
effect in 2010, especially what can and should be done
now to plan and draft for
the possible future.
II-E Ethics as Part of the Daily Mix Has
Enron Raised the Bar?
(Repeat of Session I-E)
Joseph G. Gorman, Jr.
J. Donald Cairns
Judith W. McCue
Thursday, January 9
8:00 Complimentary Continental Breakfast
9:00 a.m.
9:00 Estate Planning With GRATs and Near-GRATs Opportunities
and
9:45 a.m. Pitfalls of a Cloudy Crystal Ball
John R. Price
Despite important recent developments,
including the Walton decision, the
taxation of GRATs and near-GRATs remains a work-in-progress,
with continuing
uncertainty regarding some critical issues. This presentation
will provide a road
map of the tax issues, discuss the opportunities and
pitfalls of GRATs, sales to
IDITs, and private annuities, and review the issues
that should be considered in
deciding whether to use one of these popular techniques.
9:45 Unwinding the Discount Entity: What
Happens When the Family
10:30 a.m. Wants To Take Their Share and Run?
Richard B. Robinson
The use of valuation discount planning
entities such as FLPs can produce major
income tax headaches when one or all of the family wants
out. This program will
identify income tax problems and provide exit strategies
to minimize the income
tax costs to the family.
10:30 Break
10:45 a.m.
Wednesday, January 8 (continued)
9
10:45 What Do You Mean, Subpoena? Im a
Lawyer!
11:30 a.m.
Russell G. Allen
State law rules governing civil discovery
of attorney-client communications and
attorney work product vary significantly. Federal law,
different still, applies in
most of our tax controversies. This program will provide
a primer for trusts and
estates lawyers, focusing on problems commonly encountered
in estate
planning and administration.
11:30 a.m. One Percent, Two Percent, Three
Percent, Four No Matter What
12:15 p.m. You Pay, the Bene Wants More
Susan Porter
This presentation will cover practical
problems facing professional fiduciaries
when exercising discretionary powers pursuant to either
local law or the
governing instrument.
12:15 Lunch Break
2:00 p.m.
2:00 FUNDAMENTALS PROGRAM Everything You
Ever Wanted To
3:30 p.m. / Know About Generation-Skipping But Were
Afraid To Ask
3:45 (Runs concurrently with the Special Sessions)
5:15 p.m.
Jon J. Gallo
This presentation is designed for estate
planners with a working knowledge of
estate and gift taxation, but who are uncomfortable
when faced with planning
and drafting multi-generational estate plans. Special
attention will be given to
interrelated marital deduction/generation-skipping drafting
issues, as well as
planning and drafting the multi-generational life insurance
trust.
2:00 Special Sessions III
3:30 p.m.
III-A CASE STUDY Unwinding Discount Entities
Richard B. Robinson
Using typical client fact patterns,
this session will examine income tax traps and
pitfalls when unwinding family limited partnerships
and family corporations that
were used to obtain valuation discounts.
III-B Transfer Tax Audit Issues: What's
Hot, What's Not
(Repeat of Session II-B)
Norman J. Benford Mary Lou Edelstein
Martin E. Basson John W. Porter
III-C Post-Mortem Planning in Transition
Steve R. Akers
This workshop will focus on post-mortem
planning issues during the transition
years of the "phase out" of the estate tax.
III-D Fiduciary Firewalls: A Look at Blind
Trusts
Edmond M. Ianni
Blind Trusts, originally (and still)
utilized by public officials to avoid conflicts of
interest, are widely used in the private sector. In
an environment of heightened
Thursday, January 9 (continued)
10
corporate scrutiny and regulation, blind trusts continue
to provide a wealth
management solution for business insiders. This presentation
will examine the
practical uses and benefits of blind trusts, particularly
in the corporate sector.
We will review how blind trusts can accomplish different
wealth management
strategies and how to structure them.
III-E Timely Tech Topics & Ticklers
"Must Have" Software,
"Must Know" Technology, and "Must Do"
Stuff
Joseph G. Hodges, Jr.
Albert S. Barr, III
A summary and an overview of "must
have" software; effective (and easy to set
up and administer) professional web sites; obtaining
client information without
having to meet with the client; the current state of
data gathering and document
assembly programs; the future of e-filing of estate
planning and administration
documents; and lots of helpful tech tips for both large
and solo/small firms along
the way.
3:30 Break
3:45 p.m.
3:45 Special Sessions IV
5:15 p.m.
IV-A CASE STUDY Post-Mortem Planning With
Partnerships
Daniel H. Markstein, III
Several case studies will be used to
examine problems and opportunities that
may arise with post-mortem planning for family partnerships.
IV-B GRATs
John R. Price
This session will focus on hypotheticals
that involve the consideration of settled
and unresolved tax issues.
IV-C The FLP Side: Fiduciary Liability Potential
Russell G. Allen
Susan Porter
Knowing that the fiduciary must act
reasonably for the benefit of all
beneficiaries and may not delegate to others, how is
the fiduciary to carry out
responsibilities to avoid incurring liability when today's
beneficiaries'
expectations are often in conflict and the financial
marketplace is
ever-changing? This discussion will examine the effect
of the USA Patriot's Act
on confidentiality, transition problems with the Principal
& Income Act (including
significant state law variations), discretionary distribution
controversies,
investment-related matters (including the issues of
what is concentration and
the definition of diversification), tax-related conflicts,
and the attorney-client
and attorney work product discovery controversies.
IV-D Pleasing Mother Earth and the IRS:
Using Conservation
Easements To Save Open Space, Income and Estate Taxes
David J. Dietrich
This program will examine federal regulatory
and selected state law requirements
for conservation easements to achieve charitable income,
federal estate
Thursday, January 9 (continued)
and gift tax planning. The program
will give examples of specific conservation
easement language, will discuss practical drafting considerations
for urban and
rural open space easements, and will emphasize the integration
of conservation
easement planning with estate and income tax planning.
IV-E Split-Dollar Life Insurance
Lawrence Brody
Jonathan G. Blattmachr
Mary Ann Mancini
This panel will consider the provisions
of the long awaited proposed regulations
on the treatment of split-dollar arrangements and possible
planning techniques.
Friday, January 10
8:00 Complimentary Continental Breakfast
9:00 a.m.
9:00 The Durable Power of Attorney: Why You Should
Give More
9:45 a.m. Attention to Estate Plannings Stepchild
Karen E. Boxx
Durable powers of attorney are extremely
common and deceptively simple.
They create a unique yet ill-defined fiduciary role,
somewhere between an agent
and a trustee. This presentation will cover the scope
of the fiduciary role, the
p roblems and possible solutions re g a rding the documents
eff e c t i v e n e s s ,
including multistate use, and recent statutory trends.
9:45 Terrorism or Its Prospect The Impact
on Estate Planning
10:30 a.m.
Roy M. Adams
Since the terrible day of September
11, 2001, our world is no longer the same
and neither are the concerns and needs of many of our
clients. Many have
reconsidered where they live, where they own property,
and what types of trusts
they will use. This delicate topic must be addressed
because it is on the minds
of so many with whom we counsel. In this program, Roy
Adams will analyze the
major issues we need to address in light of the new
fears that exist, and will also
look at how we can help ease some of those fears through
prudent planning.
10:30 Break
10:45 a.m.
10:45 a.m. CASE STUDY Wrapping It Up Applying
What We Have Learned
12:00 p.m.
Louis A. Mezzullo
One or more case studies will be used
to demonstrate the practical application
of many of the planning techniques discussed during
the Institute.
__________________________________________
GENERAL INFORMATION:
Inquiries/Registration:
Philip E. Heckerling Institute on Estate Planning
University of Miami School of Law
Center for Continuing Legal Education
P.O. Box 248087
Coral Gables, FL 33124-8087
Telephone: 305-284-4762 / FAX: 305-284-6752
Web site: www.law.miami.edu/heckerling
E-mail: heckerling@law.miami.edu
===========================================
Headquarters Hotel - Fontainebleau Hilton
4441 Collins Avenue
Miami Beach, FL 33140
Telephone (305) 538-2000, FAX (305) 674-4607
==================================================
NOTICE: Although audio tapes of all of the substantive
session
at the Miami Institute currently are only made available
to Institute
registrants for purchase, the entire proceeding of the
Institute are
published annually by Lexis/Nexis. For further information,
go to
their Web site at http://www.lexisnexis.com/productsandservices.
The text of these proceedings is also available on CD
ROM from
Authority On-Demand by LexisNexis Matthew Bender. For
further
information, contact your sales representative, or call
(800) 833-
9844, or fax (518) 487-3584, or go to http://www.bender.com,
or write to Matthew Bender & Co., Inc., Attn: Order
Fulfillment Dept.,
1275 Broadway, Albany, NY 12204.
______________________________________________________
Brought to you by the ABA-PTL Discussion List Moderators
URL for ABA-PTL searchable Web-based Archives:
http://mail.abanet.org/archives/aba-ptl.html
To search the ABA-PTL archives online or manage your
subscription, go to
http://mail.abanet.org/archives/aba-ptl.html
//-----------------------------------------------------------------------
Eugene P. Zuspann II
Denver, Colorado
Mail:
ezuspann@zuspann.com
To search the ABA-PTL archives online or manage your subscription,
go to http://mail.abanet.org/archives/aba-ptl.htmlTable
of Contents
back
to 2003 Table of Contents
Report
#1- Software Vendors
back
to 2003 Table of Contents
As we have done in January for
the last six years, and again with the
permission of the University of Miami School of Law
Center for Continuing
Legal Education, we will be posting to this list throughout
the coming week
highlights of the proceedings of the 37th Annual Philip
E. Heckerling
Institute on Estate Planning that is being held January
6-10, 2003 at the
Fontainebleau Hilton Resort and Towers in Miami Beach,
Florida.
Our on-site local reporters there in Miami this year
will be identified as
their reports are received and published:
We also will be posting the full text of this year's
Reports on the ABA
RPPT Section's Web site, as we have since the 2000 Institute.
Those
Reports can be found at URL
http://www.abanet.org/rppt/meetings_cle/heckerling/home.html.
In addition,
each Report can also be accessed at any time from the
ABA-PTL Discussion
List's Web-based Archive at URL http://mail.abanet.org/archives/aba-ptl.html.
A complete listing of the proceedings and speakers
is available on the
Institute's Web site.
The URL for that site is http://www.law.miami.edu/heckerling.
===================================================
REPORT NO. 1 - Tuesday, January 7, 2003
The following report has been filed concerning the
software vendors who are
in the Exhibit Hall this year and other technology news
by our on-site
Reporter, Jason Havens Esq. of Destin, Florida, the
creator of the Legal
Research for Estate Planners Web site (http://www.jasonhavens.net):
This report covers the software and some other vendors
who are exhibiting
at the Institute. The number of software and other vendors
at the 2003
Institute has grown to 106. The software vendor list
this year includes, in
alphabetical order:
Advance Choice/Docubank
Advanced Planning Solutions, LLC
BNA/Tax Management, Inc.
Brentmark Software, Inc.
CCH INCORPORATED
CEPAC Communications
Connect2A.com
Crescendo Interactive, Inc.
Datatech Software
Eidelman Associates/WINDRAFT
Estate Works
EVP Systems, Inc.
Fast-Tax Trust Services
FASTER Systems, LLC
The Lackner Group, Inc.
LAWGIC, LLC
LexisNexis
Lynx Software
PG Calc Incorporated
Power Presentations
ProBATE Software
ProDoc
Schumacher Publishing, Inc.
WealthCounsel, LLC
West
Zane & Associates, Inc.
zCalc, LLC
Following are the highlights from the "first round"
among the software and
other vendors. These highlights are generally classified
in categories that
will hopefully prove helpful to list members. Additional
"rounds" will
follow.
A. CALCULATION SOFTWARE:
1. Brentmark: Brentmark has an exciting new software
that "does a
comprehensive estate plan" known as the Kugler
Estate Analyzer (TM). The
program uses three steps: client information, assets
& liabilities, and
techniques. The program combines Brentmark's Estate
Planning QuickView and
Estate Planning Tools capabilities in that the user
can perform calculations
and illustrate planning techniques with flowcharts.
However, the new Kugler
program includes "Inter-related Planning Techniques"
such as GST trusts,
QPRTs, GRATs, CRTs, CLATs, sales to grantor trusts,
FLPs, testamentary
charitable gifts, and more. The Kugler Estate Analyzer
(TM) is advertised
at a price of $595 with a $199 annual maintenance fee.
Brentmark also offers the Pension & Roth IRA Analyzer,
which performs
minimum required distribution calculations and many
others. Brentmark has
introduced the Asset Transfers System, which tracks
transferring and
retitling assets for a client. The Asset Transfers System
will populate
documents with the asset information entered once for
a client.
Brentmark has also taken over the ownership and future
support and
maintenance of the US Trust EPlan and Form 706 programs.
Finally, Brentmark has developed its PFP Notebook (TM),
which allows the
user to create a personal financial plan for a client
and can interact with
other
Brentmark programs.
2. CCH: CCH has also introduced a comprehensive program
known as CCH
ViewPlan Advanced (TM). This program integrates the
features of the basic
CCH ViewPlan, Beneview, and Factuary modules. The user
can calculate and
illustrate more than twenty different asset transfer
techniques including
CRTs, NIMCRUTs, CLTs, GRTs, QPRTs, and SCINs. The graphical
flowcharts are
accompanied by built-in calculation logs. The program
works seamlessly with
other CCH products such as Enteract (TM) financial planning
and Pro System
fx (R) tax software programs, and uses Microsoft standards.
3. Thomson: Thomson has brought together various products
and services.
Beyond West, Thomson now includes the Zane products:
FAS (fiduciary
accounting), 706, 1041, 709, and Fiduciary Calendar.
Thomson also offers
the RIA products, including Warren, Gorham & Lamont's
superb treatises and
the various journals of that group, including Estate
Planning.
4. zCalc: zCalc's Tool Box illustrates most estate
planning techniques.
Unlike other programs, zCalc can be customized by changing
the Tool Box
templates or the actual functions in the function library.
zCalc is still
one of the most reasonable programs of its kind at $295
for the initial
purchase and $150 per year thereafter.
B. DRAFTING SOFTWARE:
1. WealthCounsel: WealthCounsel is again a popular
booth. The
WealthCounsel drafting system includes various practice
systems built on the
HotDocs (R) document assembly platform. WealthCounsel
includes more
practice systems than most other drafting systems, from
trusts to FLPs to a
comprehensive charitable system that even features private
foundations.
WealthCounsel membership also includes a list serve,
continuing education,
and an impressive knowledge base. For all of this, users
pay a rather
costly price. An Institute special "competitive
upgrade" advertisement for
switching drafting systems offers three payment options:
(a) $590 for 20
months; (b) $2,900 down plus $390 per month for 12 months;
or (c) $6,900
paid in full for the first year.
2. Lawgic: Lawgic has been revived from the brink of
bankruptcy! Bruce
Grewell, the new "captain" of Lawgic, intends
to ensure the survival of the
Lawgic program by updating the California, D.C., Florida,
Georgia, Maryland
& Massachusetts products. It is anticipated that
the excellent attorneys at
Holland & Knight will update all such products in
the future. Lawgic offers
wills, disability planning documents, and a number of
trusts (from revocable
inter vivos trusts to ILITs to various grantor trusts),
as well as ancillary
documents and client letters. Lawgic states that it
will add states in the
near future, including New York and Virginia.
3. ProDoc: ProDoc offers Ronald Lipman's will and trust
forms, the Florida
Lawyer Support Services, Inc. (FLSSI) probate and guardianship
forms, and
probate management and accounting software as a part
of its Estate Planning
Library, which is advertised at $95 per month. Other
practice systems are
available. The newest feature of ProDoc is the Small
Office Suite, which is
essentially a case management program (somewhat similar
to Amicus Attorney
or PCLaw) that affords contact management, calendaring,
and time billing
capabilities.
4. Eidelman Associates: EP Expert (TM) uses an underlying
engine, WinDraft,
to produce documents. A user can build his or her own
document assembly
system with his or her own forms. This program also
works with DOCS Open or
iManage document assembly software.
5. Datatech: ThinkDOCS also allows a user to build
his or her own document
assembly system.
C. TRUST ACCOUNTING & RELATED ADMINISTRATION SOFTWARE:
1. Thomson: Fast-Tax gives the trust administration
user the ability to
produce tax forms. Fast-Tax interacts with Zane fiduciary
accounting
software, which is also part of the Thomson group.
2. ProBATE Software: ProBATE Software offers fiduciary
accounting and tax
compliance software, as well as a new digital workflow
program through its
new related company, Ike.com.
3. FASTER Systems, LLC: FASTER software offers a single-entry
system for
fiduciary accounting.
4. EstateWorks: EstateWorks is a web-based system that
tracks and assists
with the preparation of estate administration cases.
Users can "click"
through any part of the program and can see at a glance
the status of cases
and a checklist for each case. EstateWorks generates
documents and merges
data into MS Word and Adobe files.
5. Advanced Planning Solutions, LLC: FundingPro (TM)
trust funding software
system works similarly to the Brentmark software mentioned
above. Then
SettlementPro (TM) trust settlement software may be
used during the
post-mortem and disability administration of a trust.
Both programs run on
HotDocs (R) and are compatible with the WealthCounsel
document assembly
(drafting) system.
D. APPRAISAL & VALUATION SOFTWARE:
1. Estate Valuations & Pricing (EVP) Systems, Inc.:
EVP has released a new
version of its excellent stock and bond valuation software.
2. Other appraisal and valuation vendors abound, and
will be featured later
as time permits.
E. RESEARCH SOFTWARE & SERVICES:
1. Lexis-Nexis: Lexis features numerous estate planning
titles in its
Estate Practice and Elder Law Library, including the
University of Miami
Philip E. Heckerling Institute on Estate Planning materials.
2. Thomson: West offers a number of estate planning
research tools as well.
F. MISCELLANEOUS VENDORS:
1. Foundation Source (TM): Foundation Source offers
administration services
for private foundations. These services include maintenance
of governing
documents, tax filings, and grant processing and compliance.
Investment
services are not included and are not intended in the
scope of the offered
services.
2. Connect2A.com: Connect2A.com allows estate planning
professionals to
network, and is evidently compatible with HotDocs (R)
and thus loosely
affiliated with Advanced Planning Solutions, LLC and
WealthCounsel, LLC (all
in a row together).
3. CEPAC Communications: This company is also involved
in marketing
services specifically for legal professionals.
If any vendors or any important developments were omitted
that we should
have mentioned, please stay tuned. We will attempt to
cover all items of
interest in future reports as time permits. Thank you.
__________________________________________
GENERAL INFORMATION:
Inquiries/Registration:
Philip E. Heckerling Institute on Estate Planning
University of Miami School of Law
Center for Continuing Legal Education
P.O. Box 248087
Coral Gables, FL 33124-8087
Telephone: 305-284-4762 / FAX: 305-284-6752
Web site: www.law.miami.edu/heckerling
E-mail: heckerling@law.miami.edu
===========================================
Headquarters Hotel - Fontainebleau Hilton
4441 Collins Avenue
Miami Beach, FL 33140
Telephone (305) 538-2000, FAX (305) 674-4607
==================================================
NOTICE: Although audio tapes of all of the substantive
session
at the Miami Institute currently are only made available
to Institute
registrants for purchase, the entire proceeding of the
Institute are
published annually by Lexis/Nexis. For further information,
go to
their Web site at http://www.lexisnexis.com/productsandservices.
The text of these proceedings is also available on
CD ROM from
Authority On-Demand by LexisNexis Matthew Bender. For
further
information, contact your sales representative, or call
(800) 833-
9844, or fax (518) 487-3584, or go to http://www.bender.com,
or write to Matthew Bender & Co., Inc., Attn: Order
Fulfillment Dept.,
1275 Broadway, Albany, NY 12204.
______________________________________________________
Brought to you by the ABA-PTL Discussion List Moderators
URL for ABA-PTL searchable Web-based Archives:
http://mail.abanet.org/archives/aba-ptl.html
d
To search the ABA-PTL archives online or manage your
subscription, go to
http://mail.abanet.org/archives/aba-ptl.html
back
to 2003 Table of Contents
Report
#2 - Recent Developments
back
to 2003 Table of Contents
As we have done in January for
the last six years, and again with the
permission of the University of Miami School of Law
Center for Continuing
Legal Education, we will be posting to this list throughout
the coming week
highlights of the proceedings of the 37th Annual Philip
E. Heckerling
Institute on Estate Planning that is being held January
6-10, 2003 at the
Fontainebleau Hilton Resort and Towers in Miami Beach,
Florida.
Our on-site local reporters there in Miami this year
will be identified as
their reports are received and published:
We also will be posting the full text of this year's
Reports on the ABA
RPPT Section's Web site, as we have since the 2000 Institute.
Those
Reports can be found at URL
http://www.abanet.org/rppt/meetings_cle/heckerling/home.html.
In addition,
each Report can also be accessed at any time from the
ABA-PTL Discussion
List's Web-based Archive at URL http://mail.abanet.org/archives/aba-ptl.html.
A complete listing of the proceedings and speakers
is available on the
Institute's Web site.
The URL for that site is http://www.law.miami.edu/heckerling.
===================================================
REPORT NO. 2 - Monday, January 6, 2003 - Recent Developments
The following report has been filed by on-site reporter
Eugene Zuspann II
Esq. of Denver, Colorado regarding the following:
Recent Developments in Estate, Gift and Income Taxation
– 2002
Parts One and Two
Carlyn S. McCaffrey
Dan T. Hastings
Howard M. Zaritsky
Materials by Richard B. Covey and Dan T. Hastings
Howard Zaritsky started with an analysis of the estate
tax atmosphere in
Washington (DC) and now feels that there is at least
a 50% chance in the
next few years that Congress will repeal the estate
tax.
He discussed the regs on Split dollar arrangements.
He feels that the
final regs will adopt most of the proposed regs. They
will affect any
arrangement other than those with no equity component.
He is not
recommending any split dollar arrangements until the
regs are finalized
other than those without an equity component. Also,
he discussed the
corporate Responsibility Act of 2002 that states that
a public company may
not extend credit to any executive officer or director
and the penalties
and fines associated with this Act.
Dan Hastings - revisited the revised Uniform Principal
and Income Act and
the states adopting unitrust alternatives. He indicated
the hardest thing
is to keep up with the different states. There currently
seem to be 12
states that now have or are considering unitrust statutes.
He also discussed the proposed regs under §643
and the fact that they have
not yet been adopted as final. The effective date will
be the first year
after the regs become effective. The main issue is whether
a state’s
unitrust statute will be within the ambit of the proposed
(or final) regs.
This causes a problem in the estate tax area. A trust
which in
grandfathered from GST tax will lose its protection
if a modification
proscribed by the GST modification regulations occurs.
Income accumulated
under a pre-existing power is grandfathered because
the accumulation is not
a constructive addition, but a modification that adds
or enhances a power
to accumulate income would be a proscribed modification
because it could
increase the property passing to a lower generation.
Both the power to
adjust from income to principal and the conversion to
a unitrust could
result in such an increase, unless the trustee already
has the power to
accumulate income. He is recommending that no adjustments
be made until
after the regs become final.
Next discussed were CRT’s
Atkinson case appeal. A CRT was adopted. The instrument
was
proper but the provisions of the trust were not followed.
The payments as
provided were not paid. The court held that failure
to comply mandated a
complete denial of the charitable deduction.
Carlyn -
Final regs under §645 (election to treat trust
as part of an
estate) were issued. This is not in the materials because
it was issued
shortly before X-mas [PDF link to the same is in the
ABA-PTL
Archives). These include changes to the definitions
of a QRT (qualified
revocable trust), the election, TIN and filing requirements
and
others. Carlyn pointed out problems with the comments
(but not with the
regs) in the definition of a QRT where the grantor is
incapacitated. She
also discussed those trusts where the grantor is living
abroad, and several
other aspects of the comments. See T.D. 9032 in the
Dec 24, 2002. Federal
Register.
She discussed the Cottage Savings case and PLR 2002231011
and the
realization of gain or loss on exchange of property
interests under
§1001. In this ruling a dispute arose to the administration
of a
trust. The trust provided that the grandson was to receive
an annuity for
life with the remainder to charities. The dispute was
settled with the
charities receiving an amount now with the remaining
assets remaining in
trust. Payments will be made the grandson with the remainder
pursuant to a
general power of appointment in the grandson.. The issue
in the ruling is
whether any party would have taxable income. Anything
not appointed would
go to his descendants. The ruling held that this was
a disposition of his
interest in the trust because his entitlements are different
than those he
currently possesses. Also, any basis assigned to his
interest is
disregarded and the gain will be long term capital gain.
Dan Hastings - joint spousal revocable trusts. Two
rulings denying the
step-up in basis for the property of the surviving spouse
were issued. The
authority cited by the rulings is §1014(e). There
are two articles on this
topic in 2002 - one in Probate and Property by Howard
Zaritsky and one in
Estate Planning by Cason. Dan now feels that in certain
circumstances, the
use of this technique may have a chance of success with
no downside potential.
Carlyn discussed the final regs on ESBTs issued this
year. She discussed a
number of provisions in the final regs. The regulations
prevent the use of
currently exercisable powers of appointment. There is
not a lot that can
be done. The regs require a permanent release of this
power of
appointment. Also, the final regs permit a grantor trust
to elect to be an
ESBT.
Dan Hastings - valuation cases.
Trusts owning stock will not be aggregated to determine
control unless the
decedent has a general power of appointment. A GPOA
will be construed as
ownership.
In the Estate of Dunn, the issue is the amount of the
discount for built-in
capital gains, or more precisely, how much of a discount
should be allowed
for the tax on such gains. The Tax Court held that some
discount less than
100% rather than 100% of the tax is correct. The Fifth
Circuit held that a
discount of 100% of the tax on the built-in gains was
appropriate.
Howard discussing FLP’s.
Appeal of Strangi to the Fifth Circuit. The appeals
court supported the
Tax Court on all issues except 2036, which it remanded
to the Tax Court to
determine whether 2036 is applicable. Howard believes
that this issue is
the most relevant attack by the Service and that will
be the only one that
the Service may win in future cases.
To support the operation of an FLP, minimum documentation
should be
maintained. This includes Minute book.
__________________________________________
GENERAL INFORMATION:
Inquiries/Registration:
Philip E. Heckerling Institute on Estate Planning
University of Miami School of Law
Center for Continuing Legal Education
P.O. Box 248087
Coral Gables, FL 33124-8087
Telephone: 305-284-4762 / FAX: 305-284-6752
Web site: www.law.miami.edu/heckerling
E-mail: heckerling@law.miami.edu
===========================================
Headquarters Hotel - Fontainebleau Hilton
4441 Collins Avenue
Miami Beach, FL 33140
Telephone (305) 538-2000, FAX (305) 674-4607
==================================================
NOTICE: Although audio tapes of all of the substantive
session
at the Miami Institute currently are only made available
to Institute
registrants for purchase, the entire proceeding of the
Institute are
published annually by Lexis/Nexis. For further information,
go to
their Web site at http://www.lexisnexis.com/productsandservices.
The text of these proceedings is also available on
CD ROM from
Authority On-Demand by LexisNexis Matthew Bender. For
further
information, contact your sales representative, or call
(800) 833-
9844, or fax (518) 487-3584, or go to http://www.bender.com,
or write to Matthew Bender & Co., Inc., Attn: Order
Fulfillment Dept.,
1275 Broadway, Albany, NY 12204.
______________________________________________________
Brought to you by the ABA-PTL Discussion List Moderators
URL for ABA-PTL searchable Web-based Archives:
http://mail.abanet.org/archives/aba-ptl.html
To search the ABA-PTL archives online or manage your
subscription, go to
http://mail.abanet.org/archives/aba-ptl.html
back
to 2003 Table of Contents
Report
#3 - Tues. a.m. 1/7/03
back
to 2003 Table of Contents
As we have done in January for
the last six years, and again with the
permission of the University of Miami School of Law
Center for Continuing
Legal Education, we will be posting to this list throughout
the coming week
highlights of the proceedings of the 37th Annual Philip
E. Heckerling
Institute on Estate Planning that is being held January
6-10, 2003 at the
Fontainebleau Hilton Resort and Towers in Miami Beach,
Florida.
Our on-site local reporters there in Miami this year
will be identified as
their reports are received and published:
We also will be posting the full text of this year's
Reports on the ABA
RPPT Section's Web site, as we have since the 2000 Institute.
Those
Reports can be found at URL
http://www.abanet.org/rppt/meetings_cle/heckerling/home.html.
In addition,
each Report can also be accessed at any time from the
ABA-PTL Discussion
List's Web-based Archive at URL http://mail.abanet.org/archives/aba-ptl.html.
A complete listing of the proceedings and speakers
is available on the
Institute's Web site.
The URL for that site is http://www.law.miami.edu/heckerling.
===================================================
REPORT NO. 3 - Tuesday, January 7, 2003
The following report has been filed by on-site reporter
Eugene Zuspann II
Esq. of Denver, Colorado regarding the following:
Adventures in Life Insurance! (And You Thought It Would
Be Boring)
Jonathan G. Blattmachr
This presentation covered how to obtain income tax "deductions"
for term
premiums paid, how to avoid GST tax for a life insurance
trust without
using GST tax exemption, how to double the power of
Crummey withdrawal
rights, and how to plan with split-dollar life insurance.
About 80% of states completely exempt life insurance
proceeds from
creditors claims.
Jonathan first discussed the types of life insurance.
His conclusion -
there is only one real type of life insurance and that
is term insurance.
Life insurance is the only investment that has tax
free compounding (as
opposed to tax deferred compounding). This is even true
in muni bonds
because the issuer does not pay a rate comparable to
a taxable investment,
i.e. the bond has a lower rate.
Jonathan draws life insurance trusts so that the entire
gift lapses in the
year of the gift and the beneficiaries have the right
to withdraw their
prorata share in excess of the 5 and 5 power. This allows
the transferor
for generation skipping purposes to change to the children.
The Code
provides that each child’s shares will be considered
a separate
trust. This allows the trust to qualify for gst exemption.
Jonathan calls
this technique cascading Crummy powers.
A problem with the above scenario is that, except in
4 or 5 states, this
trust may be subject to the claims of creditors. Texas
has acknowledged
the problem and changed the law to exclude annual exclusion
gifts from
creditor claims.
Next he discussed §264 of the Code stating that
life insurance premiums are
not deductible.
He discussed the benefit of preloading a life insurance
policy so that the
excess cash in the purchase will, with the tax free
earnings, pay for the
policy over the desired term. His example had the insured
funding the
policy with $54,000 so that, with the earnings, the
policy would pay the
$91,000 premiums on a 20 year term policy at which time
the insured,
Jonathan, would let the policy lapse.
PLR 9636033
Avoiding the 3 year rule under §2035. There is
an exception for a full and
adequate sale of the policy. This can be done by making
sure the life
insurance trust is a grantor trust, and sell the policy
for the
interpolated terminal reserve to the trust.
PLR 9413045
Turning the Tables: When Do the IRS Actuarial Tables
Not Apply?
Lawrence P. Katzenstein
This presentation examined when departures from the
IRS actuarial tables
are permitted or required, including situations of under-productive
property and increased risk of mortality, and will consider
the
implications of recent decisions permitting departures
from the tables in
valuing the right to receive state lottery payments.
The purpose of this presentation is to analyze when
the actuarial tables do
not or should not apply.
An example when the tables are not used are simultaneous
deaths. They also
do not apply to retirement plans as “those sections
[of the Code] have
their own separate, prescribed rules for determining
actuarial
values.” There are also exceptions provided in
the regulations. See
Reg. Section 1.7520-3(a). Most of these deal with different
authority
provided by other sections of the Code.
The statutory authority for the tables is under IRC
§7520. Larry discussed
the ability of the service to ignore the tables. The
Service has tried to
bootstrap Revenue Rulings, rather than regulations,
to set doctrine for
ignoring the tables. He does not believe this is correct,
and that the
Service must use the tables in any case in which the
regulations do not
provide an exception
One exception in which the regs are totally silent
is the creditworthiness
of the payor in an annuity situation, i.e. an annuity
from Enron. Another
area is that of trust exhaustion. The materials cite
Estate of Benjamin
Shapiro, which is a 2013 credit case. In this case,
the Service argued
that the trust would be exhausted within 4 years. The
Tax Court held that
the tables must be used. The regulations were changed,
but Larry still
believes the regulations are wrong. The regs conclude
that if the trust
will be exhausted, the gift to the remainder beneficiaries
will go up, but
the value of the gift should go down. Larry concludes
that the correct
answer is to take into account the life expectancy of
the beneficiary and
the payment to the beneficiary, capped by the amount
going into the trust.
Another situation is that of underproductive property.
If the property in
the trust does not produce income, i.e. closely held
stock paying no
dividends in which the beneficiary does not have the
right to make the
property productive, then the tables may not be used.
Larry pointed out
the O’Reilly case in the Eighth Circuit holding
that the tables could not
be used where the dividend rate was far less than the
10% interest rate
assumed by the tables. This is a pre-7520 regulation
case.
The next situation that has little litigation or ruling
activity is when
the mortality tables cannot be used because of the physical
condition of
the measuring life. The regs provide that if the individual
is known to be
terminally ill, the tables will not apply. The regs
do provide a
rebuttable presumption that the tables may be used if
the person survives
for 18 months.
Another problem area is where the decedent has won
the lottery but dies
before receiving full payment. There are a number of
cases that hold that
the estate does not have to use the tables. This departure
from the tables
is surprising and the practitioner needs to read the
cases if the issue
presents itself.
__________________________________________
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Web site: www.law.miami.edu/heckerling
E-mail: heckerling@law.miami.edu
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As we have done in January for the last six years,
and again with the permission of the University of Miami
School of Law Center for Continuing Legal Education,
we will be posting to this list throughout the coming
week highlights of the proceedings of the 37th Annual
Philip E. Heckerling Institute on Estate Planning that
is being held January 6-10, 2003 at the Fontainebleau
Hilton Resort and Towers in Miami Beach, Florida.
We also will be posting the full text of this year's
Reports on the ABA RPPT Section's Web site, as we have
since the 2000 Institute. Those Reports can be
found at URL http://www.abanet.org/rppt/meetings_cle/heckerling/home.html.
In addition, each Report can also be accessed at any
time from the ABA-PTL Discussion List's Web-based Archive
at URL http://mail.abanet.org/archives/aba-ptl.html.
A complete listing of the proceedings and speakers is
available on the Institute's Web site.
The URL for that site is http://www.law.miami.edu/heckerling.
===================================================
REPORT NO. 4 - Wednesday 1/8/3
Worth the Effort Even Beyond the Grave - an Update of
Post-mortem Tax Planning Strategies
Steve R. Akers 1/8/3
The emphasis of the presentation was on current events
- Steve has a 145 page outline and did not try to cover
any significant portion of his materials.
Effect of 2% floor on miscellaneous itemized deductions
- §67. Scott case issued in 2002 was a
Virginia case. The case held that because in Virginia
a fiduciary could be protected by investing in certain
statutorily approved investments, that there is no reason
to hire an outside advisor. As such, in Virginia,
any such expense would be subject to §67. There
is still uncertainty in this area.
Steve discussed the new §645 regs. These were
also discussed by Carlyn on Monday. He pointed
out many of the differences between the proposed regs
discussed in his materials, and the final regs.
Alternate valuation date - dealing with assets in a
poor economy. Remember to consider an election
under §2032. Also, consider making sufficient
disclaimers or reducing the QTIP election to cause a
small amount of tax to be payable. Remember the
issue is different than several years ago because the
estate may pay some tax now that would not be due at
all if the estate tax is repealed.
Deduction of Administrative expenses attributable to
QTIP trust or other non-probate assets. The Grant
case (2d Cir, 2002) was discussed regarding the disallowance
of administration expenses and personal representative
fees on the decedents estate tax return. Although
the case seems to say these were not deductible due
to the fact that the majority of the estate was in a
revocable trust (11000 of 876000), the facts actually
indicate that many of the expenses were not deductible
anyway, i.e. expenses in selling the residence when
the estate had adequate cash to pay the estate taxes.
Also, the Maryland statutes limit the amount of both
PR and trustee fees, and those charged substantially
exceeded that amount.
Valuation of disputed claims in an estate. The
cases continue to hold that post death events are not
to be considered in determining the deduction - it is
to be determined at the moment of death. Steve
discussed the holding in the ONeal case.
The 11th Circuit held that the IRS
cannot even admit into evidence the fact that the claim
was settled for 1/17th of the amount claimed on the
706. A significant factor is that the IRS did
not put on its own expert in determining the value of
this claim, even though the parties had been ordered
to put on evidence of their positions.
Transfer of an interest in a QTIP trust. This
issue arises when the surviving spouse wants the QTIP
assets to go to the children without waiting for his/her
death. If they disclaim this extra amount in the
decedents estate there will be estate tax. An
alternative is to leave the assets outright to or in
a QTIP trust for the surviving spouse, who can assign
an interest in the property or trust. This should
not be a prearranged event. However, it uses the
applicable exclusion amount of the surviving spouse
rather than causing tax in the decedents estate. A
proposed reg was issued this year explaining the tax
effects assigning an interest in a QTIP - Prop.
Reg. §25.2511-2.
Steve discussed the valuation issues regarding funding
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