Most people believe that assets held in trust for their benefit, at least to the extent the trust assets were left in trust by a third party (such as, for example, a parent), to be exempt from the claims of their creditors. As a general rule, this belief is well founded. However, as for claims…
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Being in the midst of the holiday season, many people are making gifts to friends, family members, employees, and others important to them. Rarely is much thought given to the income tax consequences of such gifts. A recent case from the Tax Court illustrates how gifts between an employer and employee are treated.[1] Income Tax…
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Tax rules relating to S corporations are a frequent and often time-consuming problem. With the release of Revenue Procedure 2022-19[1], the IRS just made it easier for S corporations to confirm compliance with tax rules and also has eased the administrative burden on the IRS in dealing with these taxpayers. The Internal Revenue Code provides…
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The Sixth Circuit Court of Appeals has recently issued an opinion that discusses a number of topics especially important to asset protection and trust attorneys.[1] Some of the issues discussed involve trust law, tax law, asset protection law, and contract law. As recognized in the dissent, the court’s conclusions on a number of these issues…
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Last year, I wrote about the Multistate Tax Commission’s (“MTC”) undertaking called the Project on State Taxation of Partnerships (“Project”).[1] Throughout the Project, the MTC has updated the Project website with summaries, notes, markups to draft documents, and other useful information.[2] The most recent Project meeting was held on July 25, 2022.[3] Broadly speaking, the…
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“Portability” is the ability of a surviving spouse to elect to add his or her predeceased spouse’s unused estate tax exemption to their own estate tax exemption. For many clients, adoption of portability in 2010 (and making portability permanent in 2012) meant that complicated estate plans could be greatly simplified. Prior to portability, any unused…
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A recent survey prepared by The Motley Fool found that two-thirds of high-net-worth individuals are concerned about leaving their descendants too much inheritance.[1] Interestingly, the larger the inheritance received by those participating in the survey, the more likely they were to express these concerns. The predominate concerns included: Inheritance would be used irresponsibly (58.74%); Beneficiaries…
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Many practitioners think limiting creditors of an LLC member to a “charging order” is a panacea. Other practitioners think the benefits of charging orders are overblown. Who is correct? Can a member’s judgment creditor access LLC property? In addition to a recent case from the Alabama Supreme Court[1], two other recent cases illustrate how charging…
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In yet another set of headlines involving a conservatorship, Hank Williams, Jr.’s son, Sam Williams, has posted on social media that his family has placed him in a conservatorship, starting in August 2020, which he wants to end.[1] Apparently, this conservatorship was opened to protect Sam while grieving after the death of Sam’s sister in…
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What are the rights of a creditor to LLC interests to satisfy their claim? That question was at issue in a recent opinion from the Alabama Supreme Court.[1] In that case, the creditor received a “charging order” (discussed below) requiring that distributions from the LLC made to the debtor be instead transferred to the clerk…
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