NAEPC Webinars:

Wednesday, February 27, 2019 at 3:00pm - 4:00pm ET - Complimentary Sponsored Webinar: Life Settlement Case Studies and How to Protect Client Best Interests

Source: The Robert G. Alexander Webinar Series

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There is a general lack of knowledge on the part of policy owners about life settlements that leave them vulnerable to opportunistic institutional investors if they lack proper representation from their advisor/advisory team. This intermediate level program will provide a thorough exploration of life settlement case studies and best practices with the necessary procedures to help mitigate risk and provide unexpected value and protection to their clients.

Jon B. Mendelsohn, CEO of Ashar Group/Ashar SMV, is an accomplished presenter and frequent speaker at the Annual Conference of the National Association of Estate Planners and Councils (NAEPC), American Institute of Certified Public Accountants (AICPA) annual ENGAGE Conference, the Association for Advanced Life Underwriting (AALU), Advisors in Philanthropy (AIP), and several other conferences and meetings nationally. Ashar Group is an independent resource that supports financial advisors and fiduciaries by providing life insurance appraisals, life settlements, and longevity services. 

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, March 13, 2019 at 3:00pm - 4:00pm ET - Business Clients Succession Planning

Source: The Robert G. Alexander Webinar Series

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The principal theme of this session is that developing a successful business exit and estate plan is like assembling a complicated puzzle. Each part must fit with the others in order for the final image to take shape. Given the detailed knowledge of estate planning, business law, mergers and acquisitions, tax law, insurance products, financial planning, and wealth management required during the exit planning process. The objective of this session is to learn what components are needed to develop and manage a multidisciplinary team to adequately represent the client planning to exit their business. 

Peter J. Merrick, FMA, CFP®, TEP, FCSI, DTM is an income and capital enhancement consultant, speaker and author. Since the early 1990s, Peter’s career in business succession consulting and post-secondary financial education has been unparalleled in terms of depth and experience. He is considered one of the leading experts in succession planning, risk management, estate and trusts, US-Canada cross-border planning, and executive benefits and pensions across North America. Peter is a sought-after keynote speaker with expertise in project management for business succession. 

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, April 10, 2019 at 3:00pm - 4:00pm ET - Qualified Opportunity Zones

Source: The Robert G. Alexander Webinar Series

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Detailed information regarding this presentation will be posted soon.

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, May 8, 2019 at 3:00pm - 4:00pm ET - The Generational Solution

Source: The Robert G. Alexander Webinar Series

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Detailed information regarding this presentation will be posted soon.

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, June 12, 2019 at 3:00pm - 4:00pm ET - Ethical Wills

Source: The Robert G. Alexander Webinar Series

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Detailed information regarding this presentation will be posted soon.

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, July 10, 2019 at 3:00pm - 4:00pm ET - Panel Discussion: Threats to Attorney - Client Privilege in a Team Environment

Source: The Robert G. Alexander Webinar Series

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Detailed information regarding this presentation will be posted soon.

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, August 14, 2019 at 3:00pm - 4:00pm ET - Technology in Your Practice

Source: The Robert G. Alexander Webinar Series

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Detailed information regarding this presentation will be posted soon.

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, September 11, 2019 at 3:00pm - 4:00pm ET - Topic TBD

Source: The Robert G. Alexander Webinar Series

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Detailed information regarding this presentation will be posted soon.

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, October 16, 2019 at 3:00pm - 4:00pm ET - Topic TBD

Source: The Robert G. Alexander Webinar Series

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Detailed information regarding this presentation will be posted soon.

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE

Wednesday, December 11, 2019 at 3:00pm - 4:00pm ET - Longevity

Source: The Robert G. Alexander Webinar Series

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Detailed information regarding this presentation will be posted soon.

REGISTER HERE for the individual program. To register for the 2019 webinar series, please click HERE.

Spousal Lifetime Access Trust

Susan P. Rounds, JD, CPA, LL.M. (taxation), AEP®, TEP

Under the Tax Cuts and Jobs Act enacted in December 2017, the exemption amount against gift and estate taxes has doubled from the previous $5 million per person/$10 million per married couple to $10 million per person/$20 million per married couple. Indexed for inflation, the 2019 exemption has reached $11.4 million per person/ $22.8 million per married couple. The exemption amount applies to combined transfers made during life and at death.

This may be a significant opportunity for wealthy taxpayers, but will only last through the end of 2025. Under a sunset provision in the new law, the exemption will return to the previous amount of $5 million per person/$10 million per married couple, indexed for inflation, unless Congress extends the law. The change may affect a large number of current estate plans and create uncertainty around what decisions should be made to optimize the opportunity.

Transferring assets out of the estate now to reduce estate taxes later is often a good strategy, but taxpayers may be reluctant to make a large gift to take advantage of the increased exemption amount because they fear losing access to the transferred funds. Enter the Spousal Lifetime Access Trust (“SLAT”), a type of irrevocable trust that may be used to preserve the transfer tax benefit of the increased exemption amount while also building flexibility into the estate plan.

  • Structure: A SLAT is an irrevocable trust established by one spouse for the benefit of the other spouse and the couple’s children and/or grandchildren. It requires use of the donor spouse’s exemption amount to protect the transfer from gift tax.
  • Other Factors: Choosing an independent or corporate trustee is a best practice for asset protection purposes. The beneficiary-spouse can receive distributions in the discretion of the independent trustee, providing a safety-net.
  • Funding: When funding the SLAT, the grantor-spouse should use his or her separate property, as opposed to jointly owned or community property (this could make the transferred property includible in the estate of the beneficiary-spouse).
Benefits

As an irrevocable grantor trust, the SLAT may provide some of the non-tax estate planning benefits listed below, while allowing the beneficiary-spouse access to the trust funds if needed.

  • Freeze Grantor’s Estate: The transfer to the SLAT is a completed gift and therefore removes future appreciation on the contributed assets from the estate of the grantor-spouse for purposes of estate, gift and generation-skipping transfer taxes.
  • Additional Tax-Free Gifts: A SLAT is generally treated as a grantor trust for income tax purposes, meaning that the grantor is responsible for paying the trust’s income taxes, and not the trust itself. This effectively allows the grantor to make additional tax-free gifts to the trust and its beneficiaries, thereby enhancing the wealth transfer benefits of the SLAT.
Drawbacks

A few potential drawbacks to the SALT are the following:

  • Access to Funds Is Not Unlimited: If distributions are made to the beneficiary-spouse, who consistently uses them to benefit the grantor-spouse, this could be considered a retained interest on the part of the grantor-spouse and make the trust assets includible in the grantor-spouse’s estate for estate tax purposes.
  • Divorce or Death of Beneficiary-Spouse: If there is a divorce or the beneficiary-spouse dies, the grantor-spouse will lose indirect access to the trust. Accordingly, the grantor-spouse may want to limit the amount transferred to the trust, or provide that if the grantor remarries, the new spouse will be a trust beneficiary or that the trustee may lend trust property to the grantor.
  • Reciprocal Trust Doctrine: Couples may wish to establish SLATs for each other to ensure indirect access to funds. To avoid the “Reciprocal Trust Doctrine,” which could effectively undo this planning, it is generally advisable to vary the provisions of the two trusts, such as by granting a power of appointment to only one spouse or by altering the distribution standards and classes of beneficiaries.

The SLAT is an important tool that may allow a grantor-spouse to take full advantage of the increased exemption amount while permitting indirect access to the trust funds by way of the beneficiary spouse’s interest. Ideally, however, this access would never be needed, and the assets could grow income-tax free (as long as the grantor-spouse was still responsible for paying the trust’s income tax liability), and pass to the next generation free of federal estate and gift tax.

Email me at editor@naepcjournal.org with your comments and suggestions.


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