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Heard at Heckerling 2019 - Days 3 and 4

January 18, 2019

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

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The Citrin Cooperman Trust and Estate Practice enjoyed being at the 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.

The Conference ended with two great and exhausting days focusing on planning and compliance, or more accurately: how to draft, how to manage it, and how to defend it!

There was a session on the newest type of fiduciary, the Digital Asset Fiduciary. When planning for incapacity, don’t forget to make sure someone has authority to access your digital information! Read those “terms of service agreements” to learn specifics – for instance, do they end upon death? How do you value digital property?

As the world gets smaller, more of us are being asked to assist US persons with foreign assets, and non-US persons planning for their US assets and often US-based children. When working with trusts, whether foreign or domestic, it is dangerous not to understand the rules of the foreign country involved, whether the location of the foreign assets or the residence of the non-US person.

Speaking of planning for foreign persons, there were two sessions on avoiding the money laundering statutes when funding trusts. The US is lagging behind the UK and the EU in extending responsibility to attorneys, accountants, and advisors for reporting suspicious activity to the authorities, but the future seems clear, and it would be dangerous to ignore it. Planners need to truly know their client and, more importantly, the source of their funds.

A General Power of Appointment is powerful, dangerous, and wonderful. Care must be taken when granting it, either in the original document or by authorizing someone else (a trustee, trust protector, or independent trustee) to grant it. Care must be taken to ensure creditors may not reach the trust assets.

In most cases, non-grantor trusts have kept their miscellaneous deductions not subject to 2% under the new tax law. Previously, in the final year of the estate or trust, any excess deductions would be passed out to the beneficiaries, who were entitled to take these deductions on their personal returns. Whether the beneficiaries would still be entitled to take these deductions on their personal returns is the subject of debate. The IRS recently issued Notice 2018-61 to let us know they are considering the question. Stay tuned!

A few years ago, we thought the Supreme Court resolved the issue about whether an inherited IRA could be reached by the owner’s creditors, when it said it could. It turns out, some states have language in their own codes which specifically exempt inherited IRAs, and if the state protects it then the US Bankruptcy Code will recognize and respect that protection and the creditors are out of luck.

We also attended a very informative session on post-mortem planning. The speakers pointed out that there are a number of things that can be done to assist, especially in connection with IRA beneficiary designations, disclaimers, and more. Trustee and executor responsibilities were also discussed. The actual legal document (i.e. the trust and/or will) and state law will govern what needs to be done.

As we pack up and head home,  we have learned some new ideas and had other items clarified, updated and/or confirmed.  We now look forward to applying our enhanced knowledge into our firm’s expanding Trust and Estate practice group in order to assist our colleagues, clients, and friends. There is nothing like attending a national conference, with the very best of the best speaking in the sessions and at the sponsorship booths.  We’re already looking forward to next year!