April 2009 TOC

The Table of contents for the March 2009 issue of Trusts & Estates Magazine

On The Cover

Robert Longo's drawing, "Untitled (Typhoon Reversed, Philippines 4/15/99)," is meant as a portrait of emotional and physical forces. It reminded us of these economic times. Americans were hit this past month with yet another wave of bad news: Unemployment rolls swelled to 5.47 million; the jobless rate rose to a reported 25-year high of 8.1 percent.

But separate from our projections, the large scale drawing (it's about four-and-a-half feet by five-and-a-half feet) is fabulous unto itself. Completed in 2000 and part of a series, "Untitled (Typhoon Reversed, Philippines 4/15/99)," sold for U.S. $148,587 at Phillips de Pury & Company's contemporary art evening sale on Feb. 12, 2009 in London.

Another piece in this auction celebrates a brighter side of the beach: pinballs and pinups. See p. 14 for Charles Bell's "Miami Beach," which sold for U.S. $347,183.


11/ Tax Law Update

David A. Handler, a partner, and Alison E. Lothes, an associate, in the Chicago office of Kirkland & Ellis LLP report on:

  • Technical Advice Memorandum 200907025 — Because a trust agreement did not express any intent to exclude the decedent, his creditors, his estate or the creditors of his estate, the Internal Revenue Service ruled the decedent had a general power of appointment over the trust. As a result, the value of the entire trust was includable in the decedent's gross estate.
  • Private Letter Ruling 200910002 — A couple entered into a split-dollar agreement with an insurance trust regarding a survivorship life insurance policy owned by the trust. The IRS approved the agreement, holding that payment by the couple of their share of the premiums will not be taxable gifts.

12/ Foundations: Expect Short-term Reductions but Long-term Growth

Daniel L. Daniels and David T. Leibell, partners in the Stamford, Conn., office of Wiggin and Dana LLP predict that donor-involved giving is going to increase in the long-term as Baby Boomers enter retirement. But this massive giving won't happen just yet. More immediately, the Foundation Center's report, "Grantmakers Describe the Impact of the Economic Crisis on Their Giving," shows a sharp, sudden downturn.


Estate Planning & Taxation

15/ QPRTs Can Be A Good Deal Now
By Michael M. Mariani

Qualified personal residence trusts (QPRTs) are generally not considered effective in a low interest rate environment. And these days, the Internal Revenue Code Section 7520 rate is at historic lows. Yet, QPRTs present an estate-planning opportunity to be seriously considered now because of the decline in the value of real estate during the last 18 months. The technique becomes even more attractive when the trust agreement refers to the grantor's retaining a reversionary interest.

Michael M. Mariani is a senior vice president, deputy general trust counsel and director of Trust and Estate Services in the New York office of Fiduciary Trust Company International. He's also an adjunct professor at Saint John's University School of Law in Queens, N.Y.

17/ An Alternative to QPRTs
By Deborah V. Dunn, Alison E. Lothes & James J. Thibodeau

An attractive alternative to a QPRT is a remainder purchase marital (RPM) trust. It can transfer a residence to the next generation more efficiently and without the statutory restrictions applicable to a QPRT. Indeed, there are two significant advantages of using an RPM income trust instead of a QPRT: It eliminates mortality risk (and may even use mortality risk to the remaindermen's advantage instead of disadvantage) and offers greater flexibility.

Deborah V. Dunn is a partner in the Chicago office of Kirkland & Ellis LLP

Alison E. Lothes & James J. Thibodeau are associates in the Chicago office of Kirkland & Ellis LLP

Practice Development

23/ It's Personal
By Avi Z. Kestenbaum & Rachel D. Mansdorf

The best estate planning takes into account clients' intimate individual and family matters. The lawyers examine why advisors should be better trained in the psychological. Trusts & Estates editors ask a range of experts to provide a starting reading list.

Avi Z. Kestenbaum is a partner in the law firm of Meltzer, Lippe, Goldstein & Brietstone, LLP, in Mineola, N.Y. He is also an adjunct tax professor at Hofstra University School of Law in Hempstead, N.Y. and Baruch College in New York.

Rachel D. Mansdorf is an associate with Meltzer, Lippe, Goldstein & Brietstone, LLP, in Mineola, N.Y.

International Law

26/ What's a Fideicomiso?
By Amy P. Jetel

Any professional who serves high-net-worth clients eventually comes face to face with a Mexican fideicomiso and has to decide how to advise the client on how it should be taxed and reported under U.S. law. Thing is, even the IRS isn't sure. Some recommend that foreign-trust reporting be done, just to be safe. But this approach is incorrect and a waste of the client's money. Author Amy P. Jetel explains why—and presents the conclusions that she is comfortable recommending to clients.

Amy P. Jetel is a partner in the Austin, Texas, law firm, Schurig Jetel Beckett & Tackett, LLP.


38/ (Re) Entering the Market?
By Gregory D. Singer & Ted Mann

If you're going to get back into the stock market—and clients with a lot of money are going to need to—then what's the best approach? History tells us that jumping in all at once reaps the largest rewards over the long-haul. If that's too terrifying in this environment, a staged entry is a reasonable approach. But the client needs to know the price they'll be paying for wading in slowly.

Gregory D. Singer is the New York-based director of research for the Wealth Management Group at Bernstein Global Wealth Management.

Ted Mann is a New York-based analyst for the Wealth Management Group at Bernstein Global Wealth Management.



44/ Closely Held Business InterestsAnd the Trustee's Duty To Diversify
By W. Curtis Elliott & Briani L. Bennett

Trustees' duty to diversify can be at great odds with clients' wishes to maintain closely held ownership in trust to perpetuate a family business. Here are some ideas for solving, or at least mitigating, the trust law problems that can arise for a trustee seeking to oblige the desire to maintain concentrated holdings of a family business. And here's why these approaches are so necessary.

W. Curtis Elliott is a partner at Culp Elliott & Carpenter, PLLC, in Charlotte, N.C.

Briani L. Bennett is an associate at Culp Elliott & Carpenter, PLLC, in Charlotte, N.C.


58/ Michael Crichton's Posthumous Child
By Karen Donovan

About four months after the famous writer Michael Crichton died unexpectedly at age 66, a son was born to his fifth wife. Problem is, the child isn't mentioned in Crichton's will. The boy's mother has hired a high-profile litigator.

Karen Donovan is a journalist based in Cape Cod, Mass.

60/ What Clients Want To Talk About Now
By David Jacobson

Even the wealthiest are rocked by the current economic news. In fact, the rich may be even more unsettled. After all, they've lost millions. But this loss goes way beyond money. Many people have lost faith. No wonder many are thinking about all the risks to their legacies that are not tax-related. Here's what advisors can and probably should be discussing with them now.

David Jacobson is a director and a trusts and estates consultant at UBS Private Wealth Management in New York.

TAGS: Research
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