ALI-ABA Video Law Review Advanced Estate Planning Practice Update: Winter 2009 February 5, 2009 Live Video Webcast

Transcription

1 ALI-ABA Video Law Review Advanced Estate Planning Practice Update: Winter 2009 February 5, 2009 Live Video Webcast AGENDA AND SCHEDULE FACULTY PARTICIPANTS FACULTY BIOGRAPHIES STUDY MATERIALS TABLE OF CONTENTS Page ix 1. Advanced Estate Planning Practice Update: Winter Gift on Creation Argument Fails in FLP Context 2 FLP Malpractice 4 67(e) Exception to the 2% Floor 5 Disclaimer Planning is Unreliable 8 Power Subject to a Contingency 9 Protective Claims for Refund Procedure 12 Passive Asset Classification under Extension Denied for Making 6166 Election 15 Deduction of 6166 Interest 16 Tax Apportionment to Phantom Assets 17 Sale of Conservation Easement Triggers 2032A(c)(1)(A) Recapture 18 Conversion to Unitrust Does Not Trigger Gain Realization 19 Hiring the Drafting Attorney to Represent the Executor Advanced Estate Planning Practice Update: Winter By Lawrence P. Katzenstein Attempted Charitable Reformation Fails Technical Advice Memo Disclaimers and Qualified Reformation Save the Charitable Deduction Private Letter Ruling Substitution Power in GRAT Upheld Private Letter Ruling Another Failed Attempt to Reform a Defective Charitable Transfer ESB Financial V. U.S. 102 AFTR 2d Charitable Remainder Trust Technique Designated Transaction of Interest by Internal Revenue Service Notice Tax Court Upholds Private Annuity Transaction Katz v. Commissioner T.C. Memo Trust Modification to Allow Swap Power OK d by IRS Private Letter Ruling Transfer to Foreign Charitable Trust Qualifies for Gift and Estate Tax Charitable Deduction PLR vii xi xiii

2 Borrowing Power Used to Trigger Grantor Trust Status And Allow S Corporation Ownership Private Letter Ruling Duty to Diversity Case Decided by Eighth Circuit Court Of Appeals Nelson v. First National Bank and Trust Company of Williston 543 F.3d Notice Interim Guidance Issued to Reflect Changes to Code Section 6694(A) 35 Service Approves Charitable Gift Annuity Reinsurance Plan Private Letter Ruling IRS Liberalizes Investment Strategies for 529 Accounts Notice Are Lottery Winnings Valued Under Section 7520? Another Court of Appeals Weighs In Negron v. United States Advanced Estate Planning Practice Update: Winter By Virginia F. Coleman Worker, Retiree, and Employer Recovery Act of 2008 and Extension of IRA Charitable Rollover 42 PLR : Parent is Designated Beneficiary of Trust for Child Named as Beneficiary of IRA 45 PLR and ILM : Effectiveness Under Section 401(A)(9) of Reformation of Beneficiary Designation or Trust 46 PLRS and : Assignment of D. B. PLAN or IRA to Charity Does Not Give Rise to IRD 49 PLR : Reformed Pecuniary Bequest Remains a Pecuniary Bequest 51 PLR : Disclaimer of Interest in IRA 52 PLR : Split Purchase QPRT Approved PLRS ,007, 008 and : POST-QPRT QPRT Approved 53 Whitehouse Hotel LTD Partnership et al. v. Comm r, 131 T.C. No. 10: Historic Preservation Restriction Overvalued; Penalty Imposed 55 PLRs and : Grandfathered Split Dollar Arrangements 57 viii

3 Advanced Estate Planning Practice Update: Winter 2009 Thursday, February 5, :00 p.m. 3:15 p.m. Topics Legislative + Regultory Update Notice : gain avoidance on accelerated termination of CRT Minimum distribution requirement waived for 2009 IRA $100,000 rollover to charity rule extended for 2009 & 2010 FLP gift on creation argument rejected: Gross FLP Everything Done Wrong: Hurford Trust reformation for 401(a)(9) purposes fails: PLR Reformation of beneficiary designation fails: PLR State court ordered designated beneficiary ignored: PLR (e)(3) not met; state authorized reformation: TAM (e)(3) by disclaimer: PLR (e)(3) not met; state authorized reformat'n: ESB Financial v. US QPRT created for donors after QPRT termination: PLRs ,7, Split purchase QPRT: PLR No 67(e) unbundling for filing years before 2009: Notice Negron: Valuation of Annuity Stream Failed disclaimer precludes marital deduction: PLR Beneficiary disclaimer of IRA: PLR Liberalized investment changes for 529 plans: Notices , Power subject to contingency: PLR Intermission Questions & Answers Katz and private annuities v. GRATs; low interest planning opportunities Contingent v. successor beneficiary of IRA: PLR trumps 678 for grantor trust purposes: PLR Grantor's exercise of 675(4)(C) power: PLRs , Reformation to add 675(4)(C) power: PLR , No 691(a)(2): designated charity beneficiary: PLRs , Reformation to convert pecuniary to fractional fails: PLR preponderance standard changed; Notice re: preparers Protective claims for refund procedure: ECC No 9100 relief allowed for missed 6166 election: ILM Passive asset or active corporation for 6166: PLR Duty to diversify: Nelson v. First Nat'l Tax apportionment for 2035(b) liability: Application of Rhodes Foreign charitable trust; PLR ix

4 Grandfathered split dollar: PLR Waldman: Corporate Owned Insurance 2032A recapture triggered by conservation easement: PLR Charitable gift annuity reinsurance: PLR Conservation easement overvaluation: Whitehouse Hotel Deductibility of interest on 6161 deferrals: CCM Cottage Saving on trust conversion: PLR Ethics: fiduciary hires drafter: Savu v. Suntrust Bank Questions & Answers Please note that this agenda may be changed at the time of the seminar in order to present the most current topics. Times and order may change; some topics could be added or deleted. A fifteen minute break will be taken at approximately the midpoint. PROGRAM SCHEDULE February 5, 2009 Program Schedule Eastern Central Mountain Pacific Alaska Hawaii National Teleseminar/Webcast 12:00 p.m. 11:00 a.m. 10:00 a.m. 9:00 a.m. 8:00 a.m. 7:00 a.m. Adjournment 3:15 p.m. 2:15 p.m. 1:15 p.m. 12:15 noon 11:15 a.m. 10:15 a.m. Scope and Purpose: Participate in this live video webcast to stay current on developments and trends affected by important recent legislation, regulations, rulings, and cases. Total 60-minute hours of instruction: 3.0; Total 50-minute hours of instruction: 3.6. Suggested Prerequisite: Significant experience in estate planning. Educational Objective: To explore the most current and important issues in estate planning and wealth transfer taxation. Level of Instruction: Advanced PROGRAM (All Times EDT) 12:00 p.m. Estate Planning Update Panel discussion Questions and Answers* 3:15 p.m. Adjournment * Questions and Answers will be integrated into the program. Questions are welcome in advance of and during the seminar by to vquestions@ali-aba.org (Subject line: Faculty question). x

5 ALI-ABA Video Law Review Advanced Estate Planning Practice Update: Winter 2009 February 5, 2009 Live Video Webcast PLANNING CHAIR Jeffrey N. Pennell Richard N. Clark Professor of Law Emory University School of Law 1301 Clifton Road, NE Atlanta, GA FACULTY Virginia F. Coleman Ropes & Gray LLP One International Place Boston, MA Lawrence P. Katzenstein Thompson Coburn LLP One US Bank Plaza, Suite N. 7th Street St. Louis, MO xi

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7 Planning Chair FACULTY BIOGRAPHIES Jeffrey N. Pennell, Atlanta, Georgia Emory University School of Law B.S., J.D., Northwestern University Visiting Adjunct Professor, University of Miami School of Law Graduate LL.M. Program in Estate Planning ( , since 2000) Academic Fellow, American College of Trust and Estate Counsel (Regent, ); Academician, International Academy of Estate and Trust Law Memberships: American Law Institute (Associate Reporter, Restatement (3d) of Trusts; Adviser, Restatement (3d) of Property -- Wills and Other Donative Transfers); American Bar Association (Chair, Probate & Trust Division Income and Transfer Tax Planning Group ; Member of Council, , Real Property, Trust and Estate Section); Advisory Committee, Heckerling Institute on Estate Planning Publications include: CASNER & PENNELL ON ESTATE PLANNING (6th ed.)(3 vols. CCH); WEALTH TRANSFER PLANNING AND DRAFTING (West, 2005); ESTATE AND TRUST PLANNING (Co-Author) (ABA, 2005); F EDERAL WEALTH TRANSFER TAXATION (4th ed.)(west, 2003); ESTATE TAX M ARITAL DEDUCTION (BNA Tax Management Portfolio: Estates, Gifts, and Trusts No ); E STATE TAX APPORTIONMENT (Co-Author) (BNA Tax Management Portfolio: Estates, Gifts, and Trusts No ); F EDERAL TAXATION OF GIFTS, TRUSTS & ESTATES (Co-Author)(West, 1996); INCOME TAXATION OF TRUSTS, ESTATES, GRANTORS AND BENEFICIARIES (West, 1987) Planning Chair, ALI-ABA Courses of Study, Estate Planning in Depth ( ); Annual Estate Planning Update; and Skills Training for Estate Planners ( ) Faculty Virginia F. Coleman, Boston, Massachusetts Ropes & Gray LLP A.B., Radcliffe College; J.D., Harvard University Fellow, American College of Trust and Estate Counsel (Chair, Employee Benefits Committee; Estate and Gift Tax Committee; International Estate Planning Committee); Academician, International Academy of Trust and Estate Law Honors: Listed in BEST LAWYERS IN AMERICA and MASSACHUSETTS SUPER LAWYERS; Estate Planner of the Year (Boston Estate Planning Council, 2002) Government and Public Service: Law Clerk, Massachusetts Supreme Judicial Court Memberships: American Law Institute; American Bar Association (Real Property, Probate and Trust Law Section; Tax Section); International Academy of Trust and Estate Law; Sherrill House (Board of Directors); Mass General Hospital Human Subjects Committee; Mass CLE (Estate Planning Curriculum Advisory Committee) Publications Include: Editorial Board, PRAC. TAX LAW.; Editorial Board, ESTATE PLANNING xiii

8 Lawrence P. Katzenstein, St. Louis, Missouri Thompson Coburn LLP A.B., Washington University; J.D., Harvard University Adjunct Professor, Washington University School of Law Fellowship: American College of Trust and Estate Counsel Memberships: American Bar Association (Section of Taxation: Past Chair, Charitable Trust Subcommittee of Fiduciary Income Tax and Exempt Organizations Committee; Past Chair, Fiduciary Income Tax Committee); Missouri Bar Association; Bar Association of Metropolitan St. Louis; National Association of College and University Attorneys; New York University School of Law, National Center on Philanthropy and the Law (Board of Advisors); Saint Louis Symphony Orchestra (Trustee and Member of Executive Committee); American Civil Liberties Union of Eastern Missouri (Former President and Board Member); Citizens for Modern Transit (General Counsel, Past Board Member); Pershing Place Improvement Association (Trustee); Saint Louis Zoo (Board of Trustees) Publications include: Tiger Tables actuarial software; How to Squeeze the Most Tax Benefits Out of Charitable Giving, St. Louis Law (Nov. 2003) Planning Co-Chair, ALI-ABA Course of Study, Charitable Giving Techniques xiv