Here is your copy of the most recent Family Wealth Compass. This publication offers a timely roundup of estate and trust planning tips, information and news, courtesy of Gunster 's private wealth services attorneys; please contact any team member for more information.
In this latest issue, you'll find information on the following topics:
Selection of trustees
In a prior newsletter, we discussed the benefits of utilizing trusts in connection with your estate plan. As you may recall, some of the benefits include creditor and divorce protection, maintaining assets within your family, development of a business succession plan, and tax savings.
This article will focus on the selection of an appropriate Trustee for the trusts to be created under your estate plan.
Florida legislature significantly changes the limited liability company act
The Florida legislature recently passed the Florida Revised Limited Liability Company Act (the "Revised Act"), which significantly changed state law governing existing and new Florida limited liability companies ("Florida LLCs").
Broadly stated, the Revised Act contains three categories of changes to Florida law governing Florida LLCs: new mandatory provisions, changes to the default rules, other notable provisions that pose new challenges or opportunities for Florida LLCs.
Possible IRS challenge to valuation discounts
A few months ago, the IRS informally indicated to the estate planning community that it would likely issue new Regulations under Section 2704 of the Internal Revenue Code to curtail the ability of taxpayers to obtain valuation discounts when transferring an interest in a closely held company. Section 2704 was initially enacted by the IRS in 1990 to limit valuation discounts.
However, the IRS has, for the most part, been unsuccessful in challenging valuation discounts under Section 2704. It is anticipated that the new Regulations would expand the scope of Section 2704 to improve the chances of the IRS challenging valuation discounts.
Steinberg v Commissioner 145 T.C. No. 7
If you make a taxable gift and pass away within three (3) years of the gift, the gift tax you paid gets brought back into your taxable estate.
There is, therefore, always a risk this could happen causing an increased estate tax liability. What if you could somehow compensate for this risk by reducing the value of the gift upfront by having the donee agree to assume the liability of the estate tax payable if you pass within three (3) years. This technique was recently blessed in a recent Tax Court Case (Steinberg v Commissioner 145 T.C. No. 7, 9/16/2015)
