On The Cover
Fabulous faux: Brigid Berlin, famous in the 1960s as a superstar in Andy Warhol’s Factory scene, recently showed that she still has the charm and presence to hold the center of attention. This fall Doyle New York sold her personal collection of costume jewelry and, natch, threw a party in Berlin’s honor to celebrate the occasion. Admirers buzzed around the now 72-year-old, as she signed autographs and held court.
Berlin’s passion for collecting plastic baubles began while hanging out with Warhol—which seems to make sense, given Warhol’s emphasis on mass-produced artifacts. Berlin was a prolific artist in her own right, famous for a variety of efforts, including her “Tit Paintings,” made by dipping her breasts into paint and pressing them against canvases. Back in the day, she described herself as the overweight, trouble-making daughter of society parents. Her father, Richard E. Berlin, was chairman of the Hearst Corporation for five decades, and her mother, Muriel Johnson “Honey” Berlin, counted the Duke and Duchess of Windsor among her friends.
Doyle’s auction of “The Brigid Berlin Collection of Costume Jewelry” was held on Oct. 7, 2008, and included more than 200 pieces from such designers as Chanel, Yves Saint Laurent and Kenneth Jay Lane. Othe pieces sold included:
• p. 30—The high seller was a group of three “Gripoix for Chanel” costume ruby, emerald and pearl necklaces for $4,000, four times its high estimate. p. 49—A cuff, featuring gold-plated metal with three-dimensional cabochon and rhinestone flowers, by costume jeweler Cohen & Rosenberger, sold for $1,000.
LETTER TO THE EDITOR
12/ Complaint & Response
Daniel B. Evans, attorney and consultant to Leimberg & LeClair, Inc., writes: “There seems to be an error in the calculations of ‘The Net, Net Gift’ (August 2008)” and specifies. Author William H. Frazier concedes one point and argues another.
BRIEFING
15/ Tax Law Update
David A. Handler, partner, and Alison E. Lothes, associate, in the Chicago office of Kirkland & Ellis LLP, report on: •Bianca Gross v. Commissioner—The Tax Court finds (again) that a taxpayer did not indirectly gift partnership assets. Judge James S. Halpern—the same judge responsible for the decision in Holman v. Comm’r—again agreed with a taxpayer that sufficient time had passed between the funding of a family limited partnership with volatile assets (stocks) and a gift of partnership interests so that there had been no indirect gifting.
• Private Letter Ruling 200840038A—The value of a remainder interest in a qualified personal residence trust is determined under the Internal Revenue Code Section 7520 tables.
• Technical Advice Memorandum 200840008—There’s no deduction for the division of a split-interest trust when it’s done solely to obtain the charitable deduction.
• Nelson v. First National Bank and Trust Co. of Williston—A federal appeals court finds that trust agreement language trumps a state prudent investor rule so that there was no breach of duty for failing to sell trust property within two weeks of a decedent’s death.
18/ IRA Charitable Rollover Is Extended
David T. Leibell and Daniel L. Daniels, partners in the Stamford, Conn. office of Wiggin and Dana LLP, report that the IRA rollover to charity has been extended through 2009.
FEATURES
Estate Planning & Taxation
20/ Trustee Powers That Can Cause Tax Problems
By Marguerite Munson Lentz
“Tax-Sensitive” trustee powers can change the estate, gift or income tax consequences of a trust depending on who holds them. Using a series of hypotheticals involving revocable and irrevocable trusts, author Marguerite Munson Lentz examines the do’s and don’ts of tax-sensitive powers. Marguerite Munson Lentz is a partner in the Bloomfield Hills, Mich. office of Honigman Miller Schwartz and Cohn LLP.
Fiduciary Professions
32/ Multi-Participant Trusts Need a Coordinator
By John P.C. Duncan & Anita M. Sarafa
Multi-participant trusts have gained popularity, replacing the single, all-powerful trustee with a host of independent decisionmakers, all deriving their authority directly from the trust instrument. But in order for these trusts to operate effectively, a “managing directed trustee” is essential.
John P.C. Duncan is the founder of Chicago-based Duncan Associates Attorneys & Counselors.
Anita M. Sarafa is a managing director in the Chicago office of JP Morgan Private Bank.
Retirement Benefits
42/ Rescue Plans for IRAs Left to Marital Trusts
By Steven B. Gorin & Michael J. Jones
The law commissioners this October released a welcomed fix to UPIA definition of “income” so that the marital deduction won’t be lost when IRAs are left in trust for surviving spouses. Left out in the cold are all other beneficiaries. They might not have access to all the income generated by a trust to which retirement benefits were left.
Steven B. Gorin is a partner in St. Louis, Mo.’s Thompson Coburn LLP.
Michael J. Jones is a partner in Monterey, Calif.’s Thompson Jones LLP. He chairs the Trusts & Estates Retirement Benefits Committee.
SPECIAL REPORT
International Law
50/ Death Taxes Around the World
By Barbara Hauser
Ever wonder how other countries handle death taxes? Need to know where non-U.S. clients should be living at the end of their lives for the best tax treatment? Here’s a quick “A to Zed” of laws around the globe.
Barbara Hauser is the director of Private Wealth Advisory for Stanford Group (Suisse) AG in Zurich, Switzerland.
56/ When U.S. Clients Receive Money From Foreign Family Members
By Dina Kapur Sanna
Watch out. Even innocent gifts may be labeled as an effort to circumvent the tax laws if these gifts might be attributed to a foreign trust. A guide on how to stay out of trouble.
Dina Kapur Sanna is a partner in the New York office of Day Pitney LLP.
PERSPECTIVE
Estate Planning & Taxation
62/ High Flyer
By Herbert E. Nass
The man known as Evel Kneivel had the type of fame and notoriety that, in today’s celebrity-obsessed, tabloid-driven world, would’ve garnered a fortune. So it’s a wonder how he could’ve left an estate worth just $12,500—with an outstanding liability of about $64 million.
Herbert E. Nass is a founder and partner in New York’s Herbert E. Nass & Associates.