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August 2009 TOC


9/ Tax Law Update

David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, report on:

  • Conversion to grantor trust not taxable to grantorIn Chief Counsel Advice 200923024, dated Dec. 31, 2008, Internal Revenue Service senior counsel addressed the income tax consequences of conversion of a non-grantor trust to a grantor trust.
  • Another reverse QPRT approved In Private Letter Ruling 200920033, dated Feb. 3, 2009, the IRS ruled on another “reverse QPRT.” In this ruling, a “normal” QPRT — that is, a qualified personal residence trust — had ended and ownership of the residence had passed to the son.
  • Timing is everything in dismissal of a discount case — The District Court for the Western District of Washington has granted the government's motion for summary judgment against William and Stacy Linton in Linton v. United States, U.S. District Court for the Western District of Washington.

10/ A Business To Foundation Two Step

David T. Leibell and Daniel L. Daniels, partners in the Stamford, Conn., office of Wiggin and Dana LLP, report on:

A new private letter ruling shows business owners a way to transfer their businesses to a family foundation, save estate taxes, and avoid big penalties under the private foundation excise tax rules.


Estate Planning & Taxation

14/ Parent-Child Property Succession
By Lee-ford Tritt

How the revised Uniform Probate Code tries to accommodate modern definitions of “family” — and how practitioners might cope with that attempt.

An important policy debate is emerging in the United States concerning how the law of succession should change to encapsulate more fully modern American families. Changing family structures and new artificial reproductive technologies1 (ART) are redefining “parentage” in law and society.

Lee-ford Tritt is a professor at The Univeristy of Florida College of Law in Gainesville, Fla., and director of The Center For Estate Planning.

22/ Consider the ESOP
By Louis H. Diamond

No succession or estate-planning strategy is complete unless you've evaluated whether it'd be smart to use an employee stock ownership plan.

Louis H. Diamond is the managing member of Diamond ESOP Advisors PLLC in Washington


High-Net-Worth Families & Family Offices

30/ Private Bank Presentations
By Jane N. Abitanta

Wealthy families are shopping for new banks yet are nervous about making a switch. Is your sales pitch good enough to woo them to your firm? Probably not.

I don't have to tell you private bankers how tough it is out there. You already know that your clients don't trust you, your organizations are in even greater chaos than usual, and the pressure to bring in new business has reached a whole new level.

Jane N. Abitanta is the founder and principal of Perceval Associates, Inc., in New York

36/ Is It Time to Close the Family Office?
By Kathryn M. McCarthy

Here's how you know when to shut the doors. And, if you do keep it going, here's what to do to keep it healthy.

There are an estimated 3,000 single-family offices (SFOs) based in the United States1 and, according to a recent survey by the Wheaton, Ill.-based association Family Wealth Alliance, the number one concern for many is sustainability: Will the office remain financially viable? Will the family maintain the necessary cohesion and commitment? Will they manage the transition to the next generation?

Kathryn M. McCarthy is a New York City-based independent consultant to families and family offices

40/ Family Office Technology
By Jon Carrol

It's a brave new world of connectivity.

Even in the past few years, there's been a quantum leap in the ability of modern technology tools — designed to improve work group efforts and data management — to help all family office stakeholders communicate and collaborate more easily and effectively. Let's look at what's available — and how one single family office is taking advantage of it all

Jon Carroll is president and chief executive officer of Family Office Metrics, LLC. in New York



46/ Babe Ruth Hit Home Runs, But His Foundation Struck Out
By Mary C. Moran

And that failure is a lesson to us all.

Babe Ruth's biographer, the sports writer Leigh Montville, has written that the famous baseball player's early years, spent mostly in an orphanage, are covered in a fog “that settles over everything and will not leave.”

Mary C. Moran is the principal of MCM Planned Giving Services in Boston

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In business succession and estate planning involving a closely held business, employee stock ownership plans (ESOPs) should be one of the prime planning alternatives considered.

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