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Heard at Heckerling 2019 - Day 2

January 16, 2019

Mary Delman, JD
Howard Klein, CPA, MST
Cay Taylor, ESQ.

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Some takeaways from Day 2:

The Citrin Cooperman Trust and Estate Practice is live at 53rd Annual Heckerling Institute for Estate Planning in Orlando, Florida, hosted by University of Miami School of Law.  This informative conference brings together accountants, attorneys, estate planners, family offices, and more, for three days of educational seminars intended to help attendees advise their clients with the most up-to-date information and foresight into trust and estate legislation. 

One thing was clear on Day 2: the 199A will continue to make life difficult for our clients, and their accountants! Congress’ attempt to “simplify” the code and grant tax breaks to certain companies has resulted in complex rules, with incomprehensible equations and a bevy of rules that are ambiguous at best. We are finally getting some guiding regulations from the IRS, but it should make for another challenging tax season.

It was interesting to see how much of Day 2 was focused on the changing structure of American families and the ways the new tax laws are impacting their creation and dissolution. For years, tax experts and politicians have been complaining about and speaking out against the marriage penalty, and the new tax law addressed it: by creating new marriage penalties. A couple will pay as much as $37,500 more in taxes if they are married, versus the same couple unmarried but cohabiting.

Divorcing couples have also been hit: the new law took away the alimony paying spouse’s right to take an income tax deduction for those payments. An interesting idea about using trusts to offset some of the tax burden was suggested, and will be discussed more over the next couple of days at Heckerling. Stay tuned!

A thought provoking comment came up during a discussion about trusts, regarding the “spray trust” (a single trust for multiple beneficiaries), particularly when considering the creation of a spray trust for beneficiaries who already do not get along, or who are cousins rather than siblings. Presenter R. Hugh Magill, EVP at Northern Trust Corporation, said “If beneficiaries are unable to live together in a single household, they should not be required to live together in the same trust.”

There was a suggestion to help your moderately-charitable client make it over the threshold to take advantage of a charitable deduction – bunch the planned multiyear donations into a single year, by contributing to a donor advised fund and then making the intended contributions from that fund.

Speaking of charitable contributions, there were some excellent suggestions for making sure testamentary charitable bequests are made first from the decedent’s traditional IRA, saving the non-charitable beneficiaries income tax on the IRA’s IRD. We’ll have more on that upon our return.

By wandering the booths in the conference center and attending breakfast and lunch sessions, we got to hear about attractive plans and structures being offered by some of the financial services industry leaders who were present. It's inspiring to see what so many smart people are coming up with in response to the new tax code – and how quickly!

Lastly, thanks to a fun and informative breakfast with the folks at the famed auction house, Phillips, Mary and Cay learned the great lengths people are willing to go to, and the high prices some are willing to pay, for that special vintage timepiece. Who knew? And, how a woman purchased a ring for $1,500 on eBay that turned out to be worth over a million dollars! Wow!

All in all, another great, informative and exhausting day at Heckerling. Can’t wait for Day 3!