I have shewed you all things, how that so labouring ye ought to support the weak, and to remember the words of the Lord Jesus, how he said, It is more blessed to give than to receive. Acts 20:35
Quote for the Day
February 28, 2016 by Leave a Comment
Quote for the Day
February 27, 2016 by Leave a Comment
“Decanting is the act of distributing the assets of an old trust to a new one with more desirable terms. It provides an easy method for correcting errors or ambiguities, adapting a trust to changes in a settlor’s objectives or changes in a beneficiary’s circumstances, taking advantage of new planning opportunities or adding flexibility to a trust.”
Peter J. Melcher, Robert S. Keebler & Steven J. Oshins, “A Guide to Trust Decanting,” Estate Planing & Taxation, (2015)
What’s on Your Family’s Wish List?
February 26, 2016 by Leave a Comment
I listened to an interesting seminar yesterday titled “Estate Planning in Agriculture: Protecting a Way of Life” sponsored by WealthCounsel.com. Stan Miller and Robert Serio were the presenters. Serio covered the Farm Service Agency (FSA) Subsidy Programs and the Natural Resource Conservation Service (NRCS) Programs. He cautioned attorneys to be careful to not to do anything in an estate plan that would cause their farmer and rancher clients to lose benefits under those programs. Quite interesting. I briefly reported on the take-a-way yesterday.
Then Miller took over beginning with what he called “The Farm Family Wish List”:
- Don’t disqualify for USDA subsidy payments and other government benefits,
- Keep the court system of of the family business,
- Keep the farm in the family forever,
- Treat non-farming family members fairly,
- Avoid the need to liquidate the farm in order to pay for the cost of long-term care, and
- Avoid estate tax.
To that list, I would add “Avoid capital gains tax on appreciated property.”
Does Stan’s list mirror yours? What would you add to it or subtract from it?
More importantly, what have you done to make sure your wish list becomes a reality?
Quote for the Day
February 26, 2016 by Leave a Comment
“Serving as an executor or trustee is neither an honor, nor a game for beginners to play. Acting as an executor or trustee requires technical skills, experience, and an ability to deal with the family members involved. Nevertheless, clients often choose an executor and the trustee without fairly evaluating the needs of the estate or trust against the named fiduciary’s abilities to meet those needs.”
Schlesinger, Edward, Fifty-Two Questions to Ask Before Choosing Your Executor and Trustee, Successful Estate Planning Ideas and Method Service (1986).
Farm Service Agency (FSA) Subsidy Programs: When 1 + 1 = 1
February 25, 2016 by Leave a Comment
I’ll be brief, and in being brief, I’ll gloss over some details. But here’s the low down. A husband and wife farming couple can receive up to $250,000 annually in FSA program subsidies if they grow corn, soybeans, cotton, rice, and the like AND if they are actively engaged in farming AND if they are at risk of loss. Yes, that’s up to $250,000, but only so long as they are not considered “one entity.” (Yes, I realize that most couples don’t qualify for the maximum and that most receive much less, but this is a brief discussion, remember.)
The FSA treats joint trusts–essentially one trust for two spouses–corporations, and LLCs as one entity. Thus farm couples who fit the bill described in the first paragraph DO NOT want the enter into joint trusts, or they could stand to lose up to $125,000–per year. So if your estate planning attorney suggests a joint trust to you. think twice: will you lose out on farm subsidy payments if you go with a joint trust? If you would, then say no.
Quote for the Day
February 25, 2016 by Leave a Comment
Regarding the benefits of so-called gun or NFA trusts:
In gun trust planning, it’s in some ways less important to know who owns an NFA firearm and more important to consider who has the right of possession. Access equals possession. A spouse or other family member with access to an NFA firearm registered solely to one family member could be considered in technical violation of the law.
C. Dennis Brislawn, attorney
Quote for the Day
February 24, 2016 by Leave a Comment
“It’s easy to come up with new ideas; the hard part is letting go of what worked for you two years ago, but will soon be out of date.”
Roger von Oech
Two-Year-Old Granddaughters and Estate Planning
February 23, 2016 by Leave a Comment
My entire immediate family was in town for the last five days. My three children, my son-in-law, and my one grandchild–a two-year-old girl with lots to say and not enough words to say it.
Now actually, what I just wrote is true and not true at the same time. What I just described is that part of my immediate family that has my blood flowing through its veins (no, my son-in-law, doesn’t, but you get my point). I also have four sons by marriage, three daughters-in-law, and four more grandchildren, plus two very much on the way. I love them all and treat them as my own. That part of my family–colloquially known as my stepfamily–presents estate planning issues, issues I’ve discussed elsewhere and which I’ll return to in the future.
But today it’s that two-year old. She’s sparked some thoughts on the nature of estate planning. Sure it’s about the immediate future. I want my wife taken care of should I die. I want to pass something on to my children. I was to avoid taxes if possible. And on and on. But what about the two-year old? What do I do about her, if anything?
My daughter, her mother, turns 40 a month from tomorrow. Forty years old. Her little girl won’t be 40 for 38 more years. Will my estate plan be durable and well-thought-out enough to have an impact on her life? I most likely won’t be around then to make it happen. So what can I do?
Two thoughts come to mind: trusts and life insurance. Both tools have more permanence than I do. If set up and funded properly, both can be there when I can’t to make sure my hopes and dreams for my granddaughter are fulfilled. Yes, I could rely on her parents–and I might–but if I absolutely, positively want my hopes for her fulfilled, trusts and life insurance are the tools of choice.
How are you going to insure that your dreams for your family come true?
Quote for the Day
February 23, 2016 by Leave a Comment
Although the phrase implies that the carrying of the weapon is for the purpose of “offensive or defensive action,” it in no way connotes participation in a structured military organization.
From our review of founding-era sources, we conclude that this natural meaning was also the meaning that “bear arms” had in the 18th century. In numerous instances, “bear arms” was unambiguously used to refer to the carrying of weapons outside of an organized militia. The most prominent examples are those most relevant to the Second Amendment: Nine state constitutional provisions written in the 18th century or the first two decades of the 19th, which enshrined a right of citizens to “bear arms in defense of themselves and the state” or “bear arms in defense of himself and the state.” It is clear from those formulations that “bear arms” did not refer only to carrying a weapon in an organized military unit. Justice James Wilson interpreted the Pennsylvania Constitution’s arms-bearing right, for example, as a recognition of the natural right of defense “of one’s person or house”—what he called the law of “self preservation.”
Justice Antonin Scalia, District of Columbia v. Heller. 2008.
Why a Use a Gun Trust? or Why Shouldn’t I Use My Existing Living Trust to Purchase NFA Firearms?
February 22, 2016 by Leave a Comment
I had a person ask me about the difference between a gun trust and his existing living trust. I sent him the following (I’ve changed his name to protect his privacy):
Fred,
Again, thanks for contacting me about gun trusts and more specifically, how a gun trust differs from your existing living trust. I’ll try to be brief:
A gun trust or NFA trust is a purpose-built trust, meaning it is drafted specifically to handle and deal with firearms generally and NFA items specifically.
As I’m sure you’re aware, firearms, unlike almost all other property we may own, is very heavily regulated, especially when it comes to “possession” and “transfer” of those firearms—of course, NFA items are even more heavily regulated. In particular, the laws and regulations governing guns define the terms “possession” and “transfer” very broadly to the end of keeping firearms out of the hands of so-called “prohibited persons.” For example, if you own a suppressor or silencer, and you keep it in your home, and your wife or girlfriend has access to it—meaning, if they wanted to, they could pick it up willy nilly—a zealous prosecutor might consider that “constructive possession” and a violation of the law, an accidental felony, if you will.
Because of all this, the typical living trust is not suited to owning firearms and the issues that come with them. For example,
- A well-drafted gun trust has specific provisions in it to enable others to “possess” your NFA items and other firearms without running afoul of the law. The typical living trust doesn’t.
- A well-drafted gun trust has specific provisions to protect against the unlawful “transfer” of NFA and other firearms without violating the law. The typical living trust doesn’t.
- A well-drafted gun trust has specific instructions to your successor trustees, so they don’t violate the law as they deal with your firearms in the event you die or become incapacitated. The typical living trust doesn’t.
- A well-drafted gun trust comes with the forms necessary to appoint and terminate co-trustees and lifetime beneficiaries in order to effectuate the lawful possession by and transfer of your guns to others. The typical living trust doesn’t.
On a related note, each time you do buy a suppressor or other NFA item using your trust, you are going to have to submit a copy of your trust, including schedules, etc. to the ATF. Do you really want to give your entire living trust to the ATF?
For these and other reasons, the attorneys I know who practice in this area use gun trusts to handle their clients’s firearms rather than revocable living trusts.
I hope this helps. I hope we have the opportunity to work together on your gun trust.
Respectfully,
Greg Taggart