• Does the charity match your passion?
• Is the charity fiscally responsible, ethical and effective?
• Do you trust it enough to give without strings attached?
• Does the charity have strong leadership?

• Protecting trust assets from potential creditor claims against beneficiaries;
• Reducing a grantor’s estate by the amount of the gift transferred to the trust, plus the appreciation from those assets; and
• Removing the value of the trust assets from a number of succeeding generations’ estates for estate tax purposes.

To discuss whether a Dynasty Trust is right for you, please contact the attorneys at Jeffrey Burr, LTD. today.

• Proposed Regulations Issued: The Treasury (IRS) has recently issued Proposed Regulations that could have a dramatic impact on your estate planning by eliminating valuation discounts. For wealthy people looking to minimize their future certain estate tax, this is critical.  If you are concerned about protecting a family business, family investment assets, or real estate from having to be sold in order to pay the federal estate tax at your death, then it is worth investigating this.

• Act Now: Time is of the essence. Once the Proposed Regulations are effective, which could be as early as year-end, the ability to purposely structure discounts on assets of your estate might be substantially reduced or eliminated, thus curtailing your tax and asset protection planning flexibility.  Properly planning with these types of techniques takes some time to structure the various steps of the plan.  It is important to start right away.

• What are Discounts Anyway? Here’s a simple illustration of discounts and what the proposed regulations are attempting to take away: Andrew has a $20 million estate which includes a $10 million family business. He gifts 40% of the business to a special irrevocable trust to grow the asset out of his estate. The gross value of the 40% business interest is $4 million.  Since an owner of the business with a minority position cannot force a sale or redemption of its interest, the non-controlling interest in the business transferred to the trust is worth less than the pro-rata value of the underlying business. Thus, the value should be reduced to reflect the difficulty of marketing the non-controlling interest.  As a result, the value of the 40% business interest transferred to the trust might be appraised, net of discounts, at $2.4 million. The discount has reduced the estate by $1.6 million from this one simple transaction.  The proposed regulations will eliminate the ability to take the discounts for lack of control and lack of marketability, meaning that the IRS would require that the sale of 40% of Andrew’s business to a trust or family member must have a price tag of $4 million and no less.

• Election Impact: If the Democrats win the White House and the Democratic estate tax proposals are enacted, the results will be devastating to wealth transfer planning.  Pundits have predicted that a Democratic White House could affect down-ballot races and flip the Senate to the Democrats. The current administration’s estate tax “wish list” includes the reduction of the estate tax exemption to $3.5 million, elimination of inflation adjustments to the exemption, a $1 million gift exemption and a 45% rate.  However, the current Democratic presidential candidate’s plan would impose a 50% tax rate on estates above $10 million, a 55% tax rate above $50 million, and a 65% tax rate on estates over $500 million.  The Democratic plan will most likely include the array of proposals included in the current administration’s Greenbook which seek to restrict or eliminate GRATs, note sale transactions to grantor trusts, and more.  Wealthy taxpayers who don’t seize what might be the last opportunity to capture discount planning, might lose much more than just the discounts. They might lose many of the most valuable estate tax planning options.

• What You Should Do: Contact your planning team. A collaborative effort is essential to effective planning at this level. Your estate planning attorney can review strategic wealth transfer options that will maximize your benefit from discounts while still meeting other planning objectives. Projections completed by your wealth manager could be essential to confirming how much planning should be done and how. Your CPA will have vital input on wealth transfer options, federal and state income tax implications, and more. Your insurance consultant can show you how to use life insurance to backstop some of the planning strategies, in coordination with the financial forecasting done by your wealth manager, to maximize both the tax benefits and your financial security.

We are including a link to a recent New York Times^® article which discusses the proposed regulations and the affected planning in more detail.

NY TIMES – Paul Sullivan Article: Treasury Wants to End Tax Deal for Some Family-Owned Businesses.

Longevity says a lot about a firm.  Longevity of its employees in particular.  We have several long-term employees, but our longest running employee is Melina, who is celebrating 30 years with Jeffrey Burr this June!  Melina Barr-Nicolatus started with Jeffrey Burr as a paralegal in June of 1986 and has been a support beam of this firm ever since.

We wish Melina a very

Happy 30th Anniversary

with Jeffrey Burr Ltd.  Here's to many more years.

We are left to wonder how Prince would have wanted his estate / legacy divided?  Will his wishes be met?  Read the article published by wealthmanagement.com, a division of Trust and Estates Magazine:

Per recent changes in the law, Executors may have additional reporting obligations. Executors may now be required to report the basis of estate assets to the IRS and the beneficiaries of the estate by filing the Form 8971. Executors will need to complete and file the Form 8971 for estates that are required to file an estate tax return after July 31, 2015. Estate tax returns are generally only required when the estate value is more than $5,430,000 in 2015 and $5,450,000 in 2016. (Currently it is unclear whether the Form 8971 will be required for estates filing an estate tax return only to elect “portability”, although it does not appear the Form 8971 will be required in those cases.)

Although the IRS has delayed the first deadline for filing the Form 8971, the current deadline is March 31, 2016.

For additional information or if you need assistance in preparing the Form 8971, feel free to contact the attorneys at JEFFREY BURR.

Many people who establish Trusts prefer to nominate an individual, often a child or other family member, as a Successor Trustee of their Trust in the event of their death.  In this situation, the Successor Trustee is often also a beneficiary of the Trust.  A conflict of interest exists in that the individual is, on one hand, a Trustee with a number of duties and responsibilities to the Trust and its beneficiaries, and on the other hand the individual is a beneficiary of the Trust with his or her own self-interests. Normally a Court does not allow conflict of interest situations.  However, Courts recognize the fact that a person creating a Trust often wants a child or family member to serve as Successor Trustee and that the person is also one of the primary beneficiaries of the Trust.  The Court allows this type of conflict of interest, but imposes a number of duties and responsibilities on the Successor Trustee.  Some of these duties are:

• Loyalty – Trustee must administer the Trust in the interest of the Trust beneficiaries, deal fairly and impartially in Trust matters, have no self-dealing and no other conflicts of interests, and must communicate any material facts to the Trust beneficiaries.
• Impartiality– Trustee must administer a Trust so as to afford each beneficiary with the same level of benefits and protection.
• Administer Trust – Trustee must administer the Trust per the terms of the Trust agreement diligently and in good faith, must manage and preserve and make productive the Trust assets, and must account for the Trust assets to the beneficiaries.
• Identify & Segregate Trust Property – Trustee must not commingle Trust assets with non-Trust assets, and must keep Trust property separate and distinct from other property.

In summary, the Successor Trustee must always put the interests of the Trust and its beneficiaries ahead of his or her own self-interests, and must not take personal advantage of his or her position as Successor Trustee.  For example, a Successor Trustee could not sell a Trust asset such as a vehicle at a below market value to his or her own spouse or child. If the Court finds that a Successor Trustee has violated one of his or her duties and damaged the Trust or its beneficiaries, the Court will hold the Successor Trustee personally liable for such damages.

At the law offices of Jeffrey Burr, we have many years of experience assisting and protecting individual Successor Trustees in the administration of a Trust after the death of a Trustor. One of our main objectives in doing so is to educate the Successor Trustee as to his or her many duties and responsibilities so that he or she does not unknowingly violate one or more of the duties imposed upon a Successor Trustee.

More and more estates these days include digital assets in two main categories: devices and accounts.  Typically both devices and accounts have controlled access which requires a password.  You might only have a handful of devices that require passwords, such as a smartphone, home computer, laptop, tablet, and a home security system.  But the number and variety of accounts could be very surprising if you were to count them out.  Online banking (brick & mortar, and online-only), e-mail accounts, social media Facebook, Twitter, Instagram, LinkedIn), online shopping and their related consumer credit accounts (Amazon, Ebay, retail store websites), life insurance, investment accounts, online photo storage or cloud backup services, blogs and websites that you manage, photo or video sharing websites (YouTube, Vimeo, Flickr), and media purchasing sites such as GooglePlay, AmazonPrime, and iTunes.

Many of these accounts may contain information that you would like to pass on to the beneficiaries of your estate.  This could include the transfer of wealth from an online investment account, to sharing photos and videos from your life, to enjoying the songs, movies, and TV shows that you have purchased online.

The great question is this: If you were to pass away, would those who are named to handle your affairs be able to access these devices and accounts?  Unfortunately, in many cases the answer is “No” unless careful preparation is made.  The law is trying to keep up but there is no clear and reliable guarantee that your Executor or Successor Trustee will be able to access your digital assets through operation of law.  However, a court order won’t do much good to unlock your smartphone or laptop.  And in fact, your online accounts may be inaccessible by your Executor even with a court order depending upon each account’s terms of service agreement.

So what’s the solution?  A homemade solution might include storing your account ID’s and passwords somewhere safe, yet accessible, when you are gone.  You could use a password protected file on your computer, so long as you provide the password to the file and to your computer to your Executor.  There are online services and applications that can be used to store your password information.  This can be helpful even during life to keep track of your various and often related or derivative passwords.

Our firm will soon be unveiling an online document/information storage service for our clients with Everplans.  [www.everplans.com] This service has demonstrated to be an intuitive and secure location to save not only passwords and instructions for digital assets, but also a service to store and access information and instructions for many elements of your life including: estate planning documents, degrees and certifications, instructions for your pets, religious affiliation and instructions on your funeral or memorial service.

Congratulations to Jeffrey Burr and John Mugan for once again being name in the 2015 Mountain States Super Lawyers Magazine.  Read more here:
http://digital.superlawyers.com/superlawyers/mxslrs15#pg1