MARCH 2007

MARCH 2007

This is a listing of the articles in this issue. Subscribers have access to complete the complete text. Click here to search archives.


In the depths of winter, spring was in the air on Feb. 5 at Sotheby’s “Impressionist and Modern Art, Evening Sale” in London. The auction featured works by some of the world’s greatest artists: Cézanne, Chagall, Degas, Renoir, Rodin and Soutine. Many of the paintings were brightly colored depictions of blooming flowers and fields. With works largely from the Impressionist era, the event

broke records for six artists at auction and fetched more than $150 million.

To help you too dream of spring, we feature on our cover Maurice de Vlaminck’s “Symphonie en couleurs” (1905) from the collection of Charles R. Lachman, a founding partner of Revlon.

Other works from the auction are highlighted in this issue:

  • Edvard Munch’s light-hearted “Springtime” (1913) sold for $6.202 million.
  • Marc Chagall’s vibrantly colored “Bouquet devant la fenêtre” (1973) sold for about $2.67 million.


Douglas Moore and Joel H. Yudenfreund object to I. Mark Cohen’s article on individual trustees. Attorney Nick R. Taylor takes issue with an editor’s headline for an article about Robert F. Kennedy’s will.


Tax Law Update
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, reports:
  • Congressional Research Service statistics show that only a very small percentage of estates were hit by the so-called “death tax” in 2005;
  • Revenue Ruling 2007-13 finds transfers of insurance to grantor trusts are not “transfers for value”; and
  • the IRS has published positions and settlement guidelines for family limited partnerships.

Charitable Giving

David T. Leibell and Daniel L. Daniels of Cummings & Lockwood in Stamford, Conn., report: Five recent private letter rulings make it clear that the Internal Revenue Service is concerned that noncharitable beneficiaries of charitable lead trusts might benefit inappropriately from endowment returns.


Re: Espen Robak’s February 2007 article, “Restricted Securities and Illiquidity Discounts.”



Lawyer’s Group Protests the Appraiser Penalties
By William S. Forsberg and Hugh F. Drake

A task force of the Business Planning Group of the American Bar Association Section of Real Property, Probate and Trust Law submitted comments on Feb. 14 to the Internal Revenue Service pointing out serious, practical problems in the new penalty regime on appraisals imposed by the Pension Protection Act. The co-chairs of that task force explain the difficulties—and propose solutions.

William S. Forsberg is a partner at Parsinen Kaplan Rosberg & Gotlieb P.A. in Minneapolis and co-chair of the task force of the Business Planning Group of the American Bar Association Section of Real Property, Probate and Trust Law.

Hugh F. Drake is a partner at Brown, Hay & Stephens, LLP in Springfield, Ill., and co-chair of the task force of the Business Planning Group of the American Bar Association Section of Real Property, Probate and Trust Law.


What to Do With Those Existing Split-Dollar Plans
By Charles L. Ratner and Lawrence Brody

Authors Charles L. Ratner and Lawrence Brody call on advisors to deal, at long last, with client’s collateral-assignment equity split-dollar plans on the life of an employee (or joint lives of an employee and spouse) established before Sept. 17, 2003. It’s time, these two experts say, to stop hoping that the IRS will provide the necessary guidance for dealing with these problematic split-dollar plans—and start drawing some conclusions ourselves. Here, they offer their insights. Even if an advisor’s conclusion is to (still) do nothing, that decision must be an informed one.

Charles L. Ratner is the national director of personal insurance counseling at Ernst & Young LLP, in Cleveland. He is also the vice chair of the Trusts & Estates advisory board and chair of its insurance committee.

Lawrence Brody is a partner at Bryan Cave LLP in St. Louis and the leader of the firm’s Private Client Service Group. He is an adjunct professor at Washington University School of Law and a visiting adjunct professor at the University of Miami School of Law. He is the author or co-author of numerous articles and books on the use of life insurance in estate and employee benefit planning, including two BNA Tax Management Portfolios, two books for the National Underwriter Company, and a number of publications in the ABA Insurance Counselor Series.


The Swiss Annuity
By Alexander A. Bove, Jr.

Don’t just do the same old planning for asset protection: a family limited partnership here; a limited liability company there. Swiss annuities can offer asset protection, estate planning and tax deferral all in one box. And, although many estate planners feared otherwise, entities can be named beneficiaries of these annuities—which makes them very attractive for large estates.

Alexander A. Bove, Jr., is a partner at Bove & Langa, P.C. in Boston. In 1998 he was admitted to practice in England and Wales. He has published several books on estate planning, asset protection planning, taxes, trusts and estates. He also lectures internationally on these topics. From 1973 to 1995, he authored a column for the Boston Globe, “The Family Money.” Bove has another article in this issue, “Know Your Stuff,” a book review, on p. 79.


What Does It Really Mean to Diversify Trust Assets?
By Maureen S. Bateman and Faith Carter

Dumont and related stock concentration cases have left trust officers with a lot of questions: Must they automatically diversify every trust portfolio, even when clients have other assets elsewhere? Is there any way they can not diversify, when it’s in the best interests of the client, without risking liability? The authors examine the case law and offer some insights.

Maureen S. Bateman has been a partner at Holland & Knight LLP in New York since 2004. Since 2000, she’s been a director at Entergy Corporation. She is treasurer of Fordham Law Alumni Trustees. Bateman is also a former special senior counsel at Bank of America, and previously served as executive vice president and general counsel of State Street Corporation and as managing director and general counsel of United States Trust Company of New York.
Faith Carter is an associate at Holland & Knight LLP in New York.

How to Interview a Corporate Trustee
By Barbara Hauser

Lawyers don’t traditionally help their clients pick corporate trustees, but that’s a mistake. Estate planning lawyers are uniquely suited to helping clients interview fiduciaries. But first you have to know what questions are really important—and what the answers you’re likely to hear really mean.

Barbara Hauser is a director of the Family Wealth Advisory Services at Citigroup Global Markets, Inc. in New York. Previously, she was of counsel to Cadwalader, Wickersham & Taft and a partner at two Minneapolis law firms. She’d also served as chief executive advisor at Carlson Holdings, Inc. (a privately held international conglomerate) and clerked for the U.S. Court of Appeals for the Third Circuit and for Justice Potter Stewart of the U.S. Supreme Court.

Deciphering DNI in a Unitrust World
By Jeremy T. Ware

With the passage of unitrust legislation, calculating capital gains and distributable net income (DNI) has become increasingly complex, leaving fiduciaries to deal with the complications and challenges. Here’s a guide to shed some light on a rather murky area.

Jeremy T. Ware is an associate with Arnall Golden Gregory LLP in Atlanta.

Are You Seeing Our “Fiduciary Litigation” E-Newsletter?
T&E subscribers can sign-up to receive a monthly “Fiduciary Litigation” update. These e-newsletters are intended to be entertaining and informative for practitioners of all stripes. Here is a sampling:
  • “Buried Treasure,” by Karen Donovan, freelance journalist, New York;
  • “Beware the Power of Attorney,” by John T. Brooks, partner, and Samantha Weissbluth, senior counsel, Foley & Lardner LLP, Chicago;
  • “Human Nature,” Both Sides Now, by John T. Brooks and Rorie M. Sherman, editor in chief, Trusts & Estates, New York;
  • “A Dumont-Like Horror,” by John T. Brooks and Rorie M. Sherman; and
  • “Dad Wins—No Contest,” by John T. Brooks and Rorie M. Sherman.


Know Your Stuff
By Alexander A. Bove, Jr.

According to Alexander A. Bove, Jr., Trusts in Prime Jurisdictions, is a “must-read” for practitioners. It’s written by various authorities and edited by Alon Kaplan and Barbara Hauser.

Alexander A. Bove, Jr., is a partner at Bove & Langa, P.C. in Boston. He has another article in this issue, “The Swiss Annuity.”

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