Unlimited Duration Trusts - Minnesota CLE

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Ideal Estate and Asset Protection Plan?: “When the check to the funeral parlor bounces” - Anonymous CAUTION: May not work!!! If gift too much to a self-settled trust? • Possible asset protection issues • Possible estate tax issues: “Implied agreement can be inferred from circumstances” – IRC section 2036 • Risk of transferring too large of a percentage of a client’s assets to the trust (generally 10-40% is OK) © South Dakota Trust Company, LLC – All Rights Reserved 20
Summary: Self Settled Dynasty <strong>Trusts</strong> – Possible Negative Estate, GST and Gift Tax Consequences? • Gift Taxes – PLR 9837007 (Completed Gift) → IRS Refused to rule whether excluded from estate. • Estate Taxes – PRL 200944002 (Estate Tax Certainty?) – Possible Issues - Two prong test: → 2036(a) – retain possession or enjoyment of property right to income → 2038 – Revocable transfers right to designate who shall possess on enjoy property – Three Main Possibilities Re Grantor Trust Distributions and IRC 2036 (Self-Settled Trust): • No withdrawals – Not included in estate • Periodic hardship withdrawals – Maybe not included in estate • Live off trust – Included in estate – PLR – Does not address IRC 2036 Issues – 2036: “Implied agreement can be inferred from circumstances” • Generation Skipping Taxes – ETIP issue as a result of uncertainty regarding estate tax inclusion? © South Dakota Trust Company, LLC – All Rights Reserved 21
Page 1 and 2: MINNESOTA CLE’S 39 TH ANNUAL PROB
Page 3 and 4: Why Establish a Family Bank Dynasty
Page 5 and 6: Modern No [or] Long Term “Rule Ag
Page 7 and 8: Possible Future Transfer Tax Legisl
Page 9 and 10: The Advantages of the Inter-vivos (
Page 11 and 12: Current Status of Transfer Taxes an
Page 13 and 14: How the Lifetime (Inter-Vivos) Dyna
Page 15 and 16: Two Major Types of Irrevocable Inte
Page 17 and 18: Possible Self-Settled Dynasty Trust
Page 19: Possible Answers for Both Estate an
Page 23 and 24: Two Types of Dynasty Trust For Inco
Page 25 and 26: Popular No Income Tax Trust States:
Page 27 and 28: Typical Choices for Dynasty Trust T
Page 29 and 30: Types of Trust Administration •
Page 31 and 32: Advantages of a Directed Trust: •
Page 33 and 34: Typical Trust Protector Powers (Var
Page 35 and 36: Special Purpose Entity or Trust Pro
Page 37 and 38: Grantor as Investment Co-Trustee/Fi
Page 39 and 40: Discretionary Trusts: • Both Self
Page 41 and 42: Asset Protection: LLC’s and LP’
Page 43 and 44: Miscellaneous Asset Protection Cons
Page 45 and 46: Leveraging the Dynasty Trust - Prom
Page 47 and 48: Dynasty Trust - Enormous Size Poten
Page 49 and 50: • Larger Gift Tax Exemptions ($5M
Page 51 and 52: Arbitrage Over Note Interest of 1.0
Page 53 and 54: Promissory Note Sale (PNS) - Doctor
Page 55 and 56: Distribution Committee (Fiduciary,
Page 57 and 58: Sample Incentive Family Bank Dynast
Page 59 and 60: Summary: How to Structure a Dynasty
Page 61 and 62: Four Levels of Protection: 1. Self-
Page 63 and 64: Miscellaneous DAPT Considerations:
Page 65 and 66: Typical Estate Plan Maximizing Gift
Page 67 and 68: “Purpose Trust” Statute: • De
Page 69 and 70: Summary of Popular Methods for Chan
Page 71 and 72:
Change of Trust Situs Followed by R
Page 73 and 74:
1. Modifying powers of appointment;
Page 75 and 76:
Unlimited Duration Rule Against Per
Page 77 and 78:
Domestic Trust Situs Comparison Sum
Page 79 and 80:
Disclaimer: These informational mat
Page 81 and 82:
Al W. King III, J.D., LL.M., AEP (D
Page 83 and 84:
Al W. King III, J.D., LL.M. Co-Chai
Page 85:
“The PPLI Solution (Chapter 6:
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Unlimited Duration Trusts - Minnesota CLE

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