Tax Changes Impacting Estate Planning Expected Under New Administration

Changes to Both Gift and Estate and Capital Gains Taxes expected under Biden’s administration

President Joe Biden presented reform strategies during his presidential campaign creating a prudent need for high net worth families to review their estate plans early in 2021. While campaigning, President Biden proposed several tax changes, with two of them significant estate planning tax changes. The first is a premature reduction of the gift and estate tax exemption from the Tax Cuts and Jobs Act of 2017. The second is ending the step-up in tax basis for capital gains taxes on inherited property. Let’s take a look at both.

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Part 2: Asset Protection and Nevada Asset Protection Trusts, Frequently Asked Questions

Examining Nevada Asset Protection Trusts: Common Questions Our Trust Officers Receive

In Part 2, we examine typical questions regarding Nevada Asset Protection Trusts. Nevada Asset Protection is sought after globally, and among the primary reasons estate planners look to Nevada as their preferred trust jurisdiction.

In part 1, we answered six general questions we often receive about Asset Protection Trusts in general.

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Part 1: Asset Protection and Nevada Asset Protection Trusts, Frequently Asked Questions

Six Common Questions Regarding Asset Protection Trusts

Part 1 focuses on general Asset Protection Trust questions we often receive from families and advisors. Part 2 focuses on Nevada Asset Protection Trusts.

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Foreign Grantor Trust: The Basics

Care for Your Off-Shore Beneficiaries

Foreign families with loved ones in the U.S. may wish to set up a foreign grantor trust. The foreign grantor trust allows international families to take advantage of tax benefits, increased flexibility, political stability, and secure asset protection laws.

What is a Foreign Grantor Trust?

A foreign grantor trust is both a foreign trust and a grantor trust. The trust is not subject to U.S. income tax on income produced by non-U.S. situs assets. 

A revocable foreign grantor trust established in the U.S. remains revocable until the death of the grantor at which time it becomes irrevocable. The irrevocable trust benefits the U.S. beneficiary, but any U.S. situs assets are then subject to U.S. tax. 

If the settlor has the power to revoke the trust, it is considered a revocable trust for U.S. tax purposes. If the grantor is both the settlor and owns the assets in trust, it is also considered a grantor trust and is not subject to U.S. tax on non-U.S. sourced income.

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Three Significant U.S. Trust Tax Cases, One Issue: Nexus Between a State and a Trust

When are states permitted to tax undistributed trust income?

As I am researching another precedent-setting trust case for an upcoming virtual continuing education panelist discussion for IICLE (Illinois Institute for Continuing Education), it’s hard to ignore the trend we see regarding trust taxation.

In 2018, we closely followed the Fielding case’s trajectory with our business development director, Jouko Sipila, living in Minnesota and company president, Greg Crawford, gaining his graduate degree at the University of Minnesota. We watched as Fielding won in Minnesota’s Supreme Court and as the case landed on the steps of the Supreme Court of the United States.

Also, on the SCOTUS steps at the time was the Kaestner case out of North Carolina. As many of us are very aware, SCOTUS denied hearing Fielding but argued Kaestner, and the rest is history.

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Nevada Dynasty Trusts: Asset Protection for Generations

4 Reasons to Consider Establishing Your Dynasty Trust in Nevada

Choosing the right trust strategy to protect your assets is an important and often complex decision. Dynasty trusts are a great option when you need to secure assets for generations, and they minimize or even eliminate many taxes associated with trusts including distribution, estate, inheritance, transfer taxes, and more.

Once you’ve decided that a dynasty trust is right for you, the next most important decision is where you should establish your trust. Both Nevada and Delaware are considered some of the best places to establish a trust to take full advantage of friendly trust laws, because of precedents set in both Nevada and Delaware, Nevada is often considered the better choice.

If you’re feeling unsure about establishing a Nevada Dynasty Trust, here are four reasons why it’s the best choice to pass your legacy to your family for several generations.

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COVID-19 Creates a Stark Reminder That Even a Basic Estate Plan is Far Better Than No Plan

COVID-19: An Example of Just How Unpredictable Life Can Be. Why a Revocable Trust May Be a Great Starting Point For You

If COVID-19 has made you take a closer look at your financial plans, you’re not alone. You may have only recently started to establish an estate plan, or you may be rethinking the plans you had previously put in place. Now is a great time to review your financial strategies and consider establishing a revocable trust as part of your estate plan.

Chances are, you know the fundamental differences between a will and a trust, but have you considered why a trust might be the better decision for you? We review the differences and benefits of each.

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COVID-19: Why Estate Planning is More Important Than Ever

A brief overview of the two most common estate planning strategies

The current global health crisis has left many people uncertain about the future. Now more than ever, having a financial plan in place is crucial. Not only should you consider your immediate and short-term financial goals, but you should also look at long-term planning. Specifically, what plans do you have in place to make sure your wishes are carried out and your family is taken care of after you are gone?

We review the basics of Estate Planning and what to consider in light of COVID-19.

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Summarizing the 54th Annual Heckerling Institute on Estate Planning

Popular Estate Planning Topics and Innovations Presented By Industry Leaders

13-17 January 2020 @ The Marriot World Center, Orlando, FL

The weeklong 54th Annual Heckerling Institute on Estate Planning included 4,000+ attendees, including Alliance Trust Company of Nevada representatives Lou Robinson (CFO), Jouko Sipila (Managing Director), and Anthony DeMartini (Trust Officer). We have collaborated to compile the below summary covering the highlights from the conference.

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Deciding Between a Will and a Trust? The Distinctions You Need to Know

The Basics of Wills and Trusts  and What You Need to Know About Probate

We get a lot of questions about the differences between a will and a trust – but there are a few more distinctions we think you should know. Understanding how to protect your assets and your family requires knowledge of what protections your will, trust, or testamentary trust actually grants you and your beneficiaries.

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