Most tax law is made up of very detailed statutes, regulations, case law, and other guidance. Layered on top of that body of law are a number of “judicial doctrines” that seek to serve as a backstop to formalistic analyses that could result in unintended tax results, allow taxpayers to place the form of transactions…
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In asset protection planning, sometimes things go as planned. Other times, they go horribly wrong. The United States Supreme Court just issued its opinion in Yegiazaryan v. Smagin[1] which illustrates one situation where the debtor finds himself facing the potential treble damages due to alleged violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”).…
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Clients often ask where they should form a new legal entity to obtain the best creditor protection. Blogs, marketing materials, and similar items often tout one or another jurisdiction as the best place to form legal entities. It certainly is the case that state laws differ. One of those areas is in “charging order” protections…
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It is fairly common to make charitable gifts of property prior to a sale transaction. Often, those gifts are of real property or closely-held business interests. This is for good reason. Structured properly, not only do donors generally receive a charitable income tax deduction equal to the fair market value of the donated property, they…
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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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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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Is your business worth more to the IRS than it is to you? Will you owe estate tax on more value than you receive? A recent tax case illustrates how this is possible.[1] It is very common, even advisable, that closely-held business owners enter into buy-sell agreements limiting transferability of interests and setting forth procedures…
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