Tag: estate-planning
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Personal Use of Florida Residential Realty by a Nonresident Alien Shareholder of a Foreign Corporate-related Structure
Non-US citizens who don’t live in the US can use a foreign company to buy property in the US. They or their family can live in the house, but there are tax and legal rules they need to follow. The foreign company can directly own the property, or it can own a US company that…
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After Death Does Us Part: Surviving Spouse as Fiduciary and Beneficiary
When spouses name each other as the person in charge of their will and estate, it can create conflicts of interest, especially in blended families. In these situations, it might be better to appoint an outside person, like a bank or trust company, to help. This can be more expensive, but it can help prevent…
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Identifying and Reporting the Proper Taxpayer in International Structures
One of the main issues in U.S. tax law is figuring out who is responsible for paying taxes on certain income. It can be tricky when dealing with non-U.S. entities, as their classification for tax purposes is really important. Sometimes, the person or company getting the income isn’t actually the one responsible for paying taxes…
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Rethinking I.R.C. §2701 in the Era of Large Gift Tax Exemptions
For individuals or couples with a net worth of $5-10 million, there are new opportunities to transfer assets and minimize taxes as the tax exemptions have increased. One way to do this is through a “freeze partnership,” which allows for transferring appreciation of assets to younger generations while keeping control and access to income. This…
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Are Tax Expenditures Reaching Their Goals? A View from the Fiscal Cliff
Taxes help pay for things that make our society better, like roads and schools. The government gives tax breaks to encourage people to spend money. But sometimes these tax breaks don’t work as planned and end up costing the government money. Tax breaks for things like buying a house or going to college are examples…
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It’s 2013: Now What?
In 2011 and 2012, lawyers were advising clients about tax and estate planning opportunities to transfer up to $5 million tax-free. However, Congress passed the American Taxpayer Relief Act of 2012 (ATRA) at the beginning of 2013, making the planning efforts unnecessary in many cases. ATRA maintains the $5 million exclusion amount and other important…
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Use of Disclaimers by U.S. Persons in the International Context
The concept of renunciation or disclaimer of property interest comes from common law. It means that if someone is given property but doesn’t want it, they can give up their right to it. This can be useful for estate planning, especially for people with international connections. For example, a U.S. citizen who becomes a beneficiary…
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Pay Early, Pay Less: Maximizing TPT Credit Availability for Married Couples
The federal estate tax credit allows married couples to save on taxes when one spouse dies within 10 years of the other. This happens because some of the property transferred from the first spouse to the second spouse is not subject to tax in the second spouse’s estate. As a result, the combined estate tax…
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A Practical Guide to Trustee Selection: A Review of the Most Common Tax (and Nontax) Traps
When it comes to estate planning, trusts are important. Choosing the right trustee can be challenging and have consequences for taxes. There are three perspectives to consider: the person setting up the trust, the person who will benefit from it, and the trustee. This article focuses on six important things to consider when choosing a…
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Pre-Immigration Tax and Estate Planning: Pitfalls and Considerations Related to Domicile
When it comes to taxes and where someone lives for tax purposes, it’s not just about where they physically live, but also about their intention to stay there. This is determined by looking at things like where their family is, where they work, and where they live. There are also specific rules for different types…
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State Income Tax Planning for the Nonresident Floridian: The ING Trust
Florida is a great place to live because there’s no state income tax. Many people move here from other states and keep ties to their old state. Florida lawyers have to know about tax laws in other states to help their clients. Some people use a special kind of trust to avoid paying income tax…
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Estate Planning with Carried Interests: Navigating I.R.C. §2701
Private equity firms and hedge funds are moving to Florida to take advantage of tax savings. Fund managers control and invest in these funds to make profits. They get a share of the profits (called a “carried interest”) in exchange for their services. Other investors, like pension plans and wealthy individuals, also invest in these…
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Estate Planning in 2015 and Beyond: No Longer a One-Size-Fits-All Approach
In the past, estate planning for lawyers was focused mainly on reducing estate taxes, without considering other important factors like income taxes, asset protection, and charitable planning. However, recent changes in laws and the economy have made estate planning much more complex. Before 2000, estate and gift tax exemption was only $675,000 and the top…
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Plan Ahead: Protect Your #DigitalFootprint
As the world goes paperless, digital assets like photos, videos, social media accounts, and even virtual property are becoming really important. But, not many people are planning for what will happen to their digital stuff after they die. The laws about this stuff are always changing, and different websites have different rules. So, it’s important…
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International Tax and Estate Planning: Use of Check-the-Box Election in the Foreign Corporate-Trust Context
The check-the-box election is really important for international tax and estate planning. One common strategy is to use a foreign corporation owned by a trust to avoid U.S. estate tax on the death of the grantor. But with recent tax law changes, this strategy needs to be adjusted to avoid other tax issues. One way…
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The Tax Cuts and Jobs Act: Still Waiting for That Postcard
President Donald Trump signed the Tax Cuts and Jobs Act into law in December 2017. It made changes to the tax system, with the goal of making it simpler. Some parts of the tax code are easier, but others, especially for businesses, are more complicated. Many of the changes will expire in 2026. So, filing…
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New Partnership Audit Regime: Opt-Out, Push-Out, or Pay-Up?
In 2015, Congress passed a new law that changes how partnerships are audited by the IRS. It makes the partnership responsible for any extra taxes owed after an audit, instead of the individual partners. The Treasury and IRS had to create regulations for this new law, but there were a lot of problems with the…
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Demystifying the Qualified Payment Right: Structuring and Administering a §2701-Compliant Entity
Estate planners use special business entities to help families pass on their wealth without paying high taxes. They often create these entities with two types of ownership: one that gets a guaranteed return on their investment (preferred interests) and one that gets any extra profits (common interests). Older family members can give the common interests…
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Expatriation from the United States: The Inheritance Tax Under I.R.C. §2801
The Heart Act added a new tax called the Inheritance Tax, which applies to gifts or inheritances received from someone who has given up their U.S. citizenship. This tax is paid by the person who receives the gift or inheritance, not the person who gave it up. The tax rate is 40% of the value…
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Navigating I.R.C. §2036 Tax Planning with Florida Law
For many years, a common technique in estate planning has been to create a partnership or LLC to hold valuable property and then transfer ownership interests to a trust to avoid estate tax. However, the IRS may challenge these transfers as an attempt to pass untaxed wealth to future generations while still maintaining some control…
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Funding the Estate Tax: Defusing the Liquidity Time Bomb
It seems like the rules around estate taxes might be changing soon. If they do, more people might have to pay taxes on their estates when they die. As lawyers, we help our clients figure out how to pay as little tax as possible and in the least disruptive way. In this article, we talk…
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The Trust Beneficiary’s Right of Access to Information
Beneficiaries have the right to know certain information about a trust, but sometimes trustees refuse to provide it. This can lead to beneficiaries feeling upset and hiring lawyers. In some cases, the trustee may not know their responsibilities or may intentionally withhold information. This article explains what information beneficiaries can get under Florida law and…
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Charitable Giving in a Global Environment
In recent years, there has been a big increase in charitable giving across borders, with people in the United States donating a lot of money to help people in other countries. This has made it important for professionals like lawyers and accountants to understand the complicated laws around giving money internationally. It’s not just about…
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Estate Planning During an Election Year: Will It Be 2012 All Over Again?
2020 might be a very busy year for estate planning attorneys because the current laws that give people a big tax break on what they can leave to their family and friends when they die could change soon. The laws are set to expire in 2025, but some people think they might change even sooner,…