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Trust and Estates On The Cover May 08

In 1963, Betty Friedan published Feminine Mystique and helped launch the women’s liberation, which continued strong as a self-conscious movement into the 1970s and arguably may have reached a new phase this year with Hillary Clinton’s candidacy for President.

On The Cover

In 1963, Betty Friedan published Feminine Mystique and helped launch the women’s liberation, which continued strong as a self-conscious movement into the 1970s and arguably may have reached a new phase this year with Hillary Clinton’s candidacy for President. At the same time, glamour photographs have pictured women as sex kittens, bunnies and objets d’art. After all, “plus ça change, plus c’est la même chose.” And there’s no denying the beauty of many of those images. Christie’s auction in New York on April 10, 2008, sold an array of such gorgeous pictures of gorgeous women, many of them nude (including supermodel Carla Bruni, now the first lady of France). All were put on the block by German collector Gert Elfering. We can’t show you the birthday suit pix. But others also are arresting. Witness our cover photo of multi-colored lips, shot in 1986 by Irving Penn for L’Oreal. It sold for a whopping $205,000. Also featured in this issue:

• p. 40, Richard Avedon’s 1959 photo of the actress Brigitte Bardot with her famous pout, sold for $181,000;
• p. 28, Helmut Newton’s 1975 picture of Italian jewelry designer Elsa Peretti, dressed like a Playboy bunny, sold for $79,000;
• p. 35, Richard Avedon’s 1968 photo of supermodel Twiggy, her tresses taking flight, sold for $34,600.

And in case you were wondering, the picture of France’s first lady (shot by Michael Comte in 1993) sold for $91,000.

(Images: Courtesy of Christie’s)


10/ Tax Law Update

David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP, reports on: How much estate and gift taxes contribute to funding the federal government • PLR 200813023 finding a CRT can split unitrust payments between a grantor and a charity • PLR 200814011 finding a “backwards” QPRT qualifies as a QPRT • the IRS’ proposed regulations on time extensions for GST exemption allocations • the Tax Court’s decision in Estate of Anna Mirowski v. Commissioner.

16/ Giving in America

David T. Leibell and Daniel L. Daniels, partners in the Stamford, Conn., office of Wiggin & Dana LLP, say the IRS has published an article that everyone practicing in estate and philanthropic planning should keep close at hand. It’s rare to find this much valuable data about tax-exempt organizations in one place—and even rarer to find such data placed in the context of the historical development of the tax-exempt sector.



19/ Discount Private Split-Dollar— Does It Work?

By Donald O. Jansen & Charles L. Ratner

Discount private split-dollar is a popular new technique. Promoted nationally, it involves a private split-dollar arrangement that subjects the premium payer’s rights to severe restrictions intended to significantly reduce the value of his interest in the arrangement for gift- and estate-tax purposes. In essence, discount private split-dollar is supposed to be both a premium financing technique and a wealth transfer technique. Problem is: the strategy is vulnerable to attack by the IRS on many fronts.
Donald O. Jansen is the Austin, Texas-based senior tax attorney in the Office of the General Counsel at the University of Texas System.
Charles L. Ratner is the Cleveland-based director of Personal Insurance Counseling for Ernst & Young LLP. He’s also vice-chair of Trusts & Estates advisory board and chair of the magazine’s Insurance Committee.

Retirement Benefits

25/ A Costly and Unnecessary Detour

By Michael J. Jones

Taxpayers are being forced to pay for PLRs so that the Service can tell them individually what it should declare to all: Surviving spouses can roll over a decedent’s retirement plans—even when death benefits are left to them in a trust or estate. So far, 45 PLRs have been issued okaying the move for 13 scenarios. It’s time the IRS issued guidance.
Michael J. Jones is a partner in Monterey, Calif.’s Thompson Jones LLP. He’s also chair of the Trusts & Estates Retirement Benefits Committee.

29/ Notice 2008-30’s Thumbs Up

By Christopher R. Hoyt

The IRS has surprised and delighted practitioners in Notice 2008-30 by okaying the one-step rollover of a decedent’s retirement account into a Roth IRA for a beneficiary.
Christopher R. Hoyt is a professor of law at the University of Missouri-Kansas School of Law in Kansas City, Mo. He’s also a member of the Trusts & Estates Retirement Benefits Committee.

Asset Protection

32/ Florida Surprise

By Barry A. Nelson

Recent cases show the Sunshine State is going strong as a haven—despite the 2005 Bankruptcy Act. Indeed, in six major decisions, homeowner debtors were able to retain all or a portion of the value of their properties after a bankruptcy proceeding. Indeed, these decisions are producing some surprisingly good results for Florida homeowners who did not maintain a “Florida homestead.”
Barry A. Nelson is a shareholder in North Miami Beach, Fla.’s Nelson & Nelson, P.A.


38/ Giving and Loaning Art to Charity

By Paul R. Comeau & Alexander M. Popovich

The value and size of private art collections have grown in recent years. Also, increasing amounts of artwork being displayed in museums are either donated or on loan from private collections.The result: advisors can expect to have at least one client looking to transfer or loan artwork to a museum. If that’s you, be aware of the many rules as well as the pitfalls involved.
Paul R. Comeau is the chairman and Alexander M. Popovich is an attorney at Hodgson Russ LLP in New York.

44/ Custom Bond Valuations Can Save Clients Money

By Barry A. Nelson & Michael S. Piwowar

Institutions get higher prices for bonds than individuals—yet standard bond valuations are based on the institutional prices. The result: individuals can pay unnecessarily high estate taxes. Time to stop that.

Barry A. Nelson is a shareholder in North Miami Beach, Fla.s’ Nelson & Nelson, P.A.
Michael S. Piwowar is a principal with Fairfax, Va.’s Securities Litigation and Consulting Group, Inc.

49/ Custom Bond Valuations Don’t (Necessarily) Save Clients Money

By Kristopher M. Burak

Nowadays, the discrepancy between the prices that institutions and individuals receive for bonds shouldn’t that great. So standard bond valuations shouldn’t be that off from custom bond valuations and shouldn’t produce significant estate tax savings.
Kristopher M. Burak is a fixed income and equity analyst in the Lansing, Mich., office of Rehmann Financial.


Estate Planning & Taxation

51/ My Crystal Ball

By Conrad Teitell

What is to be the fate of the federal estate tax? Reporting from the Senate, veteran estate-planning lawyer Conrad Teitell hazards an educated guess.
Conrad Teitell is a principal at Cummings & Lockwood in Stamford, Conn.

56/ GRAT Effectiveness

By Ajay Badlani & Thomas Mendham

Low interest rates and turbulent financial markets may make this an ideal time to use option strategies within grantor-retained annuity trusts. The authors’ research into current stock option premiums suggests that pursuing covered call option writing strategies can meaningfully boost the probability that the returns on investments in a GRAT could exceed the discount rate that is used in creating that GRAT—especially in shorter time frames.
Ajay Badlani is a managing director and Thomas Mendham is a vice president in the US Investement Solutions group at Citi Private Bank in New York.


Estate Planning & Taxation

62/ Father Does Not Always Know Best

By Herbert E. Nass

Actor Heath Ledger’s untimely death also happened to leave his last will and testament in place—virtually disinheriting his only child. A tragedy all around.
Herbert E. Nass is the principal of Herbert E. Nass & Associates in New York.

TAGS: Research
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