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Time to Give Thanks and Review Your Goals

Happy Thanksgiving from the Private Client group at Bryan Cave!  

Now is the time everyone comes together to remember what they’re thankful for this year.  In conjunction with being thankful for the blessings in our lives, it also is a good time to review your estate planning goals, such as the following:

  • Have you retained enough cash flow for you (and your spouse) in order to maintain your standard of living and provide you with security for your lifetimes?
  • Have you provided for your surviving spouse so he or she will be taken care of after you’re gone?
  • Have you prepared a prenuptial agreement to protect your assets upon divorce?  See our post on Prenuptial Agreements.
  • Have you protected your children (or other beneficiaries) by protecting their inheritance from creditors? See our post on Creditor’s Rights.
  • Have you protected your children (or other beneficiaries) by reducing

Law Meets Science

Law Meets Science

November 24, 2014

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

451428613Advances in medical technology have made it possible for a child to be conceived after the death of one or both of his or her genetic parents with the use of stored sperm or ova. Recently, the New York State Legislature has sent a bill to Governor Coumo which clarifies when a child born after the death of his or her genetic parents, a so called posthumously conceived child, will be deemed a child of such parents for the purpose of inheritance and intestacy law. This issue may arise when a genetic parent who will ultimately have a posthumously conceived child dies without a Will or with a Will using the generic term child or issue. Does the posthumously conceived child take a share

IRS Rules on Estate Tax Treatment of Joint Trust Created in Non-Community Property State

stk119517rkeSeveral non-community property states have recently enacted statutes authorizing the creation of a joint trust by spouses that would be treated as entireties property, protected from the creditors of either spouse during their joint lifetimes, but would split into a separate Family Trust and Survivor’s Trust when one of them died. The question many estate planning lawyers have raised is whether the Family Trust would be includible in the survivor’s estate for Federal estate tax purposes when the survivor died. This question has now been answered at least as to one taxpayer in a private letter ruling, PLR 201429009 (released 7/18/2014).

In this private letter ruling, a Husband and Wife created a joint revocable trust. During their lives, they contributed their joint property

Bryan Cave Trusts and Estates Practice Receives National and Metropolitan First Tier Rankings by U.S. News & World Report

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U.S. News and Best Lawyers have joined to rank more than 12,000 firms in the U.S. in 120 practice areas in 174 metropolitan areas and 8 states.

Bryan Cave’s Trust and Estates Practice Group (“Private Client CSG”) received National First Tier Ranking and the Atlanta, Kansas City, Orange County, and St. Louis offices all received First Tier Rankings in metropolitan cities.

Congratulations to the Private Client Group!

The 2015 report of more than 12,000 firms by practice area is based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field and review of additional information provided by law firms as part of the formal submission process. Results were combined into an overall “Best Law Firms” score for each firm.

Transfer for Value Rules on the Sale of a Survivor Life Policy

97733572In two substantially identical private letter rulings, PLR 201423009 (released 6/6/2014) and PLR 201426005 (released 6/27/2014), the taxpayers requested guidance as to the impact of a sale of a survivor life policy from a grantor trust where both insureds are the grantors to a grantor trust where only one of the insureds is the grantor.

The proceeds of a life insurance policy are free from income taxation in the hands of the recipient after the death of the insured(s), unless during the life of the insured(s) there was a transfer of an interest in the policy for valuable consideration. However, the transfer for value rule does not apply in two circumstances set out in § 101(a)(2)(A) and (B).

1. As provided in § 101(a)(2)(A), the transfer for value rule will not

They Still Haven’t Learned…The Terms of the Plan Control

513104781Just as Mr. Dabney learned in our prior post, Dennis Bohner learned about the Plan Document Rule in Bohner v. Commissioner. Here Bohner participated in the Civil Service Retirement System as a government employee. When he retired, he received correspondence that he could increase the amount of his retirement annuity if he sent the plan administrator $17,832, which he did.

However, since Bohner did not have that cash available in any other account, he withdrew $5,000 from his IRA and borrowed the balance of the funds to make that payment. He then withdrew an additional amount from his IRA to pay back the borrowed funds. Like Dabney, Bohner ignored the Form 1099-R and did not report these withdrawals on his income tax return and treated them as rollovers from his IRA to

When Will They Learn? The Terms of the Plan Control

81178323The provisions of IRC § 408 do permit investment of IRA assets in any kind of asset other than those specifically prohibited, such as life insurance and collectibles. Therefore, it was somewhat reasonable for Guy Dabney to conclude that he could invest his IRA account assets in real estate. However, the Tax Court in Dabney v. Commissioner took Mr. Dabney to task for failing to follow the terms of the IRA Account Agreement that governed his IRA.

In this case, Dabney wanted to use his IRA assets to purchase a piece of undeveloped land in Utah that he considered to be priced below its fair market value. So he did what a lot of us do when we want to learn something new—he went to the Internet. Based on

Kids Are Going to Do What Kids Are Going to Do…and the Trust Protector May Not Have the Power to Stop Them

180197523There is much confusion about what a trust protector can and cannot do with respect to a trust for which the trust protector is serving. First and foremost, the trust protector’s powers provided by state statute are often limited to the powers authorized in the trust instrument, as reflected by the Court in Schwartz v. Wellin, 2014 WL 1572767 (D.S.C., April 17, 2014).

Keith Wellin created the Wellin Family 2009 Irrevocable Trust (“Trust”), a dynasty trust for the benefit of his three children and their respective lineal descendants, with his children and the South Dakota Trust Company as the Trustees. After creating this Trust, Milton sold his interest in the Friendship Partners LP (“FLP”) to the Trust, taking back a promissory note for $50 Million. Apparently in 2013, a dispute arose between Keith

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