A properly designed and implemented estate and/or business succession plan is key to providing for and protecting loved ones in the most tax–efficient manner possible. A team of advisors must be assembled from the disciplines of law, insurance, finance, accounting, and tax in order to create a plan that optimizes planning opportunities incorporating both the current state of law with the current state of one’s mind. J.K. Lasser Pro Estate and Business Succession Planning, Second Edition provides you with a unique and comprehensive analysis of the Economic Growth and Tax Relief Reconciliation Act of 2001, the new retirement distribution rules, Section 529 education plans, and split dollar insurance guidelines. It can help professionals and experienced individuals alike take advantage of opportunities presented by the new tax law, avoid common mistakes, and understand complex estate and business succession planning techniques. Written by two attorneys who specialize in estate planning matters, this easy–to–read book provides you with complete information and strategies for a variety of issues including:
- How to plan in light of the phased–in provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001
- Top twenty factors to consider when creating one’s Will, as well as creating a Power of Attorney and Health Care Proxy
- Annual Exclusion and Exemption Equivalent Planning
- Irrevocable Life Insurance Trusts and Crummey Notices
- Charitable Remainder Trusts and Foundations
- Family Limited Partnerships
- Business Succession Planning Techniques
- Split Dollar Plans
- Section 529 education plans
- Retirement distribution rules
- Self–Canceling Installment Notes
- Intentionally Defective Grantor Trusts
- GRITs, GRATs, and GRUTs
And this is just a sampling of the expertise that the authors provide in a truly unique and understandable text. J.K. Lasser Pro Estate and Business Succession Planning, Second Edition contains all you need to make the most of the new tax law while navigating this complex area, and shows you how to protect and provide for loved ones for generations to come.
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Chapter 1: The Heart of the Estate Plan.
What Is Estate Planning?
What Is Business Succession Planning?
Designing and Implementing the Plan.
The Team of Advisers.
Capturing the Heart of the Plan.
Chapter 2: Your Last Will and Testament.
Twenty Factors to Consider in Preparing a Last Will and Testament.
Assembling the Team.
Change in Circumstances.
Creating the Structure of Your Last Will and Testament.
Executing the Will.
Testamentary Age–Terminating Trusts for Minor Children.
Bequests to Friends and Grandchildren.
Passing of Real Estate.
Personal Property Memorandum.
Disinheriting a Spouse and/or Family Members.
Children from Prior Marriages.
Who Will Take Care of Your Pets?
Funeral and Burial Arrangements.
Letter to One′s Executor.
Chapter 3: Power of Attorney.
Durable Power of Attorney.
Springing Durable Power of Attorney.
Limited Power of Attorney.
Power of Attorney and Gifting.
Selecting an Attorney–in–Fact.
Chapter 4: Advance Directive for Health Care–Your Living Will.
Ignoring Right–to–Die Orders.
Instruction Directives or Living Wills.
Appointing a Health–Care Agent.
Chapter 5: Utilization of the Lifetime Gift Exemption, Deathtime Exemption, and Annual Exclusion Gifts.
Back–Ended Deathtime Exemption Increases.
Tax Rates Still Onerous.
Use It or Lose It.
Unlikelihood of Estate Tax Repeal.
How Do I Plan While Acknowledging the Law Is Likely to Change?
Deathtime Exemption Equivalent Planning.
Deathtime Disclaimer Planning.
Lifetime Gift Tax Exemption.
Gifting for Education and Health Care.
Choosing the Appropriate Assets to Gift.
Chapter 6: Spousal Planning.
Qualified Terminable Interest Property Trust.
Qualified Domestic Trust.
Power of Appointment Trust.
Chapter 7: Irrevocable Life Insurance Trusts.
Factors to Consider Before Creating an Irrevocable Life Insurance Trust.
The Three–Year Look–Back.
Incidents of Ownership.
Administration of the Life Insurance Trust.
Second–to–Die (Survivorship) Life Insurance Trust.
Provisions to Include in the Life Insurance Trust.
Irrevocable Trust versus Beneficiaries Owning the Life Insurance Policy.
Life Insurance Planning in Anticipation of Estate Tax Reform.
Chapter 8: Generation–Skipping Transfer Tax.
Predeceased Ancestor Exception.
Annual and Lifetime Exclusions from GST Tax.
Computation of GST Tax Liability.
Effective Use of the Lifetime GST Tax Exemption.
Technical Relief Under the Economic Growth and Tax Relief Reconciliation Act of 2001.
Chapter 9: Transferring Wealth to Minors.
Uniform Gifts to Minors Act Account.
Trust Created Under Code Section 2503(c).
Trust Created Under Code Section 2503(b) (Mandatory Income Trust).
Qualified Tuition Programs (529 Plans).
Chapter 10: Integrating Retirement Planning with Estate Planning.
Required Beginning Date.
Lifetime Minimum Distributions.
Estate Planning with Retirement Plan Assets.
Funding a QTIP Trust with Plan Assets.
Charitable Remainder Trust.
Chapter 11: Charitable Planning.
Common Forms of Charitable Planning.
How Do You Determine the Amount of the Charitable Deduction?
Chapter 12: Supplemental Needs Trusts.
Safeguarding the Trust.
Sources of Funding.
Choosing a Testamentary Trust.
Chapter 13: Qualified Personal Residence Trust.
The Savings You Can Expect.
Death of the Grantor Prior to the End of the QPRT Term.
During the QPRT Term.
The Expense Factor.
Sale, Destruction, or Damage of the Residence.
Post Survival of the QPRT Term.
QPRT Planning After the New 2001 Tax Act.
Chapter 14: Integrating the Titling of Assets with the Intent of the Estate Plan.
Titling Faux Pas.
Jointly Held Property.
Tenants in Common.
Revocable Inter Vivos Trusts.
Life Insurance in Matrimonial Actions.
IRAs and Qualified Plans.
Chapter 15: Business Succession Planning..
What Is Business Succession Planning?
Who Is Responsible for Planning?
Commitment and Execution Are Pivotal.
Seeking Professional Counsel.
Chapter 16: Start with a Business Valuation.
General Valuation Comments and Observations.
Estate and Gift Tax Implications.
Fundamental Factors of the Business Valuation.
Chapter 17: Buy–Sell Agreements.
Use of a Buy–Sell Agreement upon the Death of a Shareholder.
Use of a Buy–Sell Agreement in Determining Price for the Stock of a Deceased Shareholder.
Acceptance of Price Determination Methods by the IRS.
Cross–Purchase versus Redemption Agreements.
Chapter 18: Funding Buy–Sell Agreements.
Can Life Insurance Help?
Disability Buyout Insurance.
Chapter 19: Transference of Business Interests.
Factors to Be Considered Before Gifting Company Stock.
Enhanced Estate Liquidity.
Planning for Control of Family Business.
Loss of Step–Up in Basis.
Loss of Control over Property.
Methods of Transfer.
Qualified Subchapter S Trust.
Electing Small Business Trust.
Failure to Implement Gifting Program During One′s Life–Partial Tax Relief Under Code Sections 6166 and 303.
Chapter 20: Family–Owned Business Deduction.
Initial Qualifying Rules.
The 50% Test.
Existence of Trade or Business.
Qualified Heir Test.
Chapter 21: Family Limited Partnerships.
Who Controls the Partnership?
Discounting the Value of the Limited Partnership Interest.
Should You Form an Entity to Serve as the General Partner?
Chapter 22: Grantor Retained Annuity Trusts and Grantor Retained Unitrusts.
What Is a GRAT?
What Is a GRUT?
GRAT or GRUT–Which One Should You Choose?
Assets to Be Placed in the GRAT or GRUT.
Qualified Annuity Interests/Fixed Term.
Minimizing the Mortality Risk of a GRAT/GRUT.
Sale of the GRAT Remainder Interest to a Dynasty Trust.
GRAT Planning After the Enactment of the 2001 Tax Act.
Chapter 23: Intentionally Defective Grantor Trusts.
The Major Benefit of an IDGT.
Implementation of an IDGT.
Drafting the IDGT Trust Agreement.
IDGT versus GRAT.
Chapter 24: Split Dollar Life Insurance.
The Split Dollar Financing Arrangement.
Benefits of a Split Dollar Arrangement.
Ownership of the Life Insurance Through an Irrevocable Life Insurance Trust.
Different Types of Split Dollar Arrangements.
Loans from the Cash Value in the Life Insurance Policy.
Private Split Dollar.
Chapter 25: Self–Canceling Installment Notes and Private Annuities.
Selling Assets as an Estate Planning Tool.
Self–Canceling Installment Note.
Chapter 26: Conclusion.
Fact Pattern #1.
Fact Pattern #2.
Fact Pattern #3.
Fact Pattern #4.
Fact Pattern #5.
Appendix A: Estate and Gift Tax Rates.
Appendix B: Tax Rates.
ROBERT C. KAUTZ is a Partner with the law firm of Wilentz, Goldman & Spitzer. Mr. Kautz chairs the Tax Department at Wilentz and concentrates his practice on estate planning and working with closely held businesses in designing strategies for business succession planning. Mr. Kautz is a contributing author to the Institute of Continuing Legal Education s Sophisticated Estate Planning. Formerly with the law firms of Battle Fowler and Millbank, Tweed, Hadley & McCloy in New York, Mr. Kautz holds an LLM in taxation from New York University. He currently serves on the board of trustees of the Montclair (NJ) Fund for Educational Excellence.