Unlimited Duration Trusts - Minnesota CLE

More documents

Recommendations

Info

Selected Directed Trust States: Alaska * North Carolina Arizona Ohio Colorado South Dakota * Delaware * Tennessee Florida ** Virginia Maine Washington ** Nebraska Washington D.C. Nevada ** Wyoming New Hampshire *Murphy Case Dynasty Statutes and no state income tax state (Best) **No state income tax, but not Murphy case Dynasty Statute state Murphy Case/Suspension of the Power to Alienate (Best Dynasty Trust States): • The Murphy case approach, which the IRS acquiesced in 1979, to abrogating or abolishing the RAP is key according to most GST and RAP experts. • This approach shifts the perpetuities inquiry from remoteness of vesting to suspension of the power to alienate. – For example, if the trustee has an explicit or implied power to sell, the trust jumps outside the rule of suspension of alienation, which limits the duration of the trust. • Generally, these states have also abrogated their RAP, which addresses the timing issue. • As a result, these states address both the timing and the vesting issues associated with doing away with their RAP as required by the Murphy case. © South Dakota Trust Company, LLC – All Rights Reserved 30
Advantages of a Directed Trust: • No requirement to diversify trust investments/assets – Can hold large concentration in one stock (public or closely-held) • Ability to provide broad asset allocation models for trust assets, for example: Harvard University Endowment: Yale University Endowment: Foreign Bonds 2% Domestic Bonds 5% Publicly Traded Commodities 2% High Yield 2% Inflation- Indexed Bonds 4% Domestic Equities 13% Foreign Equities 13% Domestic Equity Natural 6% Resources 7% Foreign Equity 8% Bonds and Cash 4% Private Equity 35% Natural Resources 15% Emerging Marketings 13% Real Estate 12% Private Equities 19% Source: Harvard University Endowment, Harvard Management Company, 2012 • Investment committee responsible for initial due diligence and quarterly monitoring of investment assets Absolute Return 18% – Directed administrative trustee does not have to interfere • Excellent control and flexibility in both up and down economic cycles Source: Yale University Endowment, Yale University Investments Office, 2012 © South Dakota Trust Company, LLC – All Rights Reserved Real Estate 22% 31
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 and 20: Possible Answers for Both Estate an
Page 21 and 22: Summary: Self Settled Dynasty Trust
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: Types of Trust Administration •
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:
show all

Unlimited Duration Trusts - Minnesota CLE

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?