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  • DESIGNING AND DRAFTING REVOCABLE TRUSTS First Run Broadcast: April 1, 2014 1:00 p.m. E.T./12:00 p.m. C.T./11:00 a.m. M.T./10:00 a.m. P.T. (60 minutes) Revocable trusts are among the most flexible and beneficial vehicles for estates of every size. In addition to their tax benefits, in many instances they allow property to be transferred outside of probate. They are also comparatively easy to administer. But they also come with complexity and traps. Distributions above certain low levels are taxable. Holding interests in family businesses, personal residences or life insurance policies each come with special challenges. Also, any failure to carefully coordinate revocable trust planning with settlors wills and larger estate plans can lead to a loss of all benefits. This program will provide you with a practical guide to designing and drafting revocable trusts, their relationship to pour over wills, discuss special issues related to family businesses, personal residences, life insurance policies, and cover distribution and tax traps.

    Designing and drafting revocable trusts Drafting Funding/pour over and distribution clauses, and spendthrift protections Distribution and tax traps planning to avoid taxability commonplace distributions Issues related to personal residences, family businesses, life insurance policies and

    married settlors Trustee issues selection, duties, removal/replacement Working with clients with mental competence issues Coordinating wills estate plans with revocable trusts

    Speaker: William Kalish is a partner in the Tampa office of Akerman Senterfitt, LLP. His practice focuses on advising individual clients and their families on their estate and trust plans, including wills, revocable trusts, irrevocable trusts, charitable trusts, private foundations, and limited partnerships. He also practices in probate administration, asset preservation, business succession planning for family-owned entities, and the division of business interests in the context of divorce. He is a Fellow of the American College of Trust and Estate Counsel, formerly served as chair of ABA Tax Section, and has served as an Adjunct Professor of Law at Stetson Law School teaching estate planning. Mr. Kalish received his B.A. from the University of Pittsburg and his J.D. with honors from George Washington University Law School.

  • VT Bar Association Continuing Legal Education Registration Form

    Please complete all of the requested information, print this application, and fax with credit info or mail it with payment to: Vermont Bar Association, PO Box 100, Montpelier, VT 05601-0100. Fax: (802) 223-1573 PLEASE USE ONE REGISTRATION FORM PER PERSON. First Name ________________________ Middle Initial____Last Name___________________________

    Firm/Organization _____________________________________________________________________

    Address ______________________________________________________________________________

    City _________________________________ State ____________ ZIP Code ______________________

    Phone # ____________________________Fax # ______________________

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    Planning & Drafting Revocable Trusts Teleseminar April 1, 2014 1:00PM 2:00PM

    1.0 MCLE GENERAL CREDITS

    PAYMENT METHOD:

    Check enclosed (made payable to Vermont Bar Association) Amount: _________ Credit Card (American Express, Discover, Visa or Mastercard) Credit Card # _______________________________________ Exp. Date _______________ Cardholder: __________________________________________________________________

    VBA Members $75 Non-VBA Members $115

    NO REFUNDS AFTER March 25, 2014

  • Vermont Bar Association

    CERTIFICATE OF ATTENDANCE

    Please note: This form is for your records in the event you are audited Sponsor: Vermont Bar Association Date: April 1, 2014 Seminar Title: Planning & Drafting Revocable Trusts

    Location: Teleseminar Credits: 1.0 MCLE General Credit Luncheon addresses, business meetings, receptions are not to be included in the computation of credit. This form denotes full attendance. If you arrive late or leave prior to the program ending time, it is your responsibility to adjust CLE hours accordingly.

  • PROFESSIONAL EDUCATION BROADCAST NETWORK

    Speaker Contact Information

    DESIGNING AND DRAFTING REVOCABLE TRUSTS

    William KalishAkerman Senterfitt, LLP Tampa, Florida(o) (813) 223-7333william.kalish@akerman.com

  • Revocable Trusts &Pour Over Wills:Core ConceptsWilliam Kalish, Esq.April 1, 2014

  • Akerman | 2

    Your presenter:

    William Bill Kalish

    Direct: 813.209.5035

    william.kalish@akerman.com

  • Akerman | 3

    Settlor/Grantor: The person who creates the trust;

    The Trust Agreement itself and its assets,

    Trustee: the person who controls the trust and its assets, and

    Beneficiaries: those who are entitled to receive the benefits fromthe trust asset, (i.e., income and principal)

    Some BasicsGenerally

  • Akerman | 4

    Not a required party

    Can be used to implement Settlors wishes

    Especially useful for post-mortem planning

    The Trust Protector may:

    Terminate the trust

    Reduce or accelerate distributions to a beneficiary

    Name additional beneficiaries

    Remove beneficiaries

    Remove or replace individuals and corporate trustee

    Make changes to the trust to take advantages of tax laws

    Change the situs of the trust for beneficial choice of law

    The Trust Protector

  • Akerman | 5

    1) Business judgment, honesty and integrity

    2) Ability/desire to exercise a high degree of care over trust property

    3) Risk aversion (loss avoidance)

    4) Legal capacity to contract (generally 18+ years of age)

    5) Geographically close

    6) Ability to manage / uphold Settlors goals (relative to the size of the assets)

    7) If there is a business, then business acumen

    8) Investment ability Prudent Investor

    9) Nonprofessional Trustee (family/business partner)which may minimize fees charged by professionaltrustees.

    Trustee SelectionImportant Factors

  • Akerman | 6

    Simple: All trust income is distributed in the year it is earned.

    Complex: Can accumulate income, distribute principal and makecharitable gifts.

    Qualifies as a separate tax entity that deducts incomedistributed and pay tax on income retained.

    Revocable: Settlor retains the right to revoke the trust

    Irrevocable: A trust that is not revocable

    Trust ClassificationGenerally

  • Akerman | 7

    When does a Rev Trust become Irrevocable?

    The earlier of when:

    the Settlor gives up the right to revoke or the Settlors death

    It is possible to set triggering events such as incapacity

    Irrevocability may trigger adverse gift tax implications

    A taxable gift is made when a settlor parts with dominion and controlover property

    Immediate gift taxation may be blocked by the reservation of atestamentary power of appointment over a remainder interest

    Works even if the grantor becomes mentally incompetent sincethere is a legal presumption that capacity may be regained.

    ConversionRevocable to Irrevocable Status

  • Akerman | 8

    Acts as a Will substitute that avoids estate administration

    Delegate property management responsibility

    May help facilitate Closely Held Business succession planning

    Post death/disability continuity of management & income flow

    Protects against personal asset management problems broughton by mental incapacity

    if assets titled in own name, conservatorship/guardianship islikely required

    Probate Avoidance: minimized delay and cost; increased privacy

    Revocable TrustsWhy choose them?

  • Akerman | 9

    Reduce estate administration costs; may avoid out of state ancillaryprobate administration

    Cost transparency

    Sometimes reduces potential for election against/contest of will (i.e., lackof capacity, undue influence) when trust is in operation during Settlorslifetime.

    Dictate choice of law

    Protect assets post-mortem for various beneficiaries with potentialcreditor issues or marital claims

    Availability of generation skipping tax techniques

    Revocable TrustsWhy choose them?

  • Akerman | 10

    When costs exceed benefits

    May open door to creditors (e.g., assets held by the entireties)

    When a trust strategy does not achieve asset management goals:

    Example State statutes regulating the corporate practice ofprofessionals (e.g., physicians, lawyers, etc.) may prevent any non-licensed professional (individual or entity) from owning an interest in aprofessional service corporation.

    Tax Issues: IRC 2032 alternate valuation entity; S Corporations Issues;and fiscal year end decisions

    Lifetime Complexity

    Transfers may raise property law, contract law, and insurance issues

    May affect credit / lending opportunities

    Inevitably missed assets (settlor doesnt fund / contribute properly)

    Revocable TrustsWhen NOT to choose them/downsides:

  • Akerman | 11

    Most states require token funding at the creation of the trust

    Dry Trusts may be deemed void

    Maintain records of a valid devise to avoid problems

    Records of Funding Key

    Establishes the cost basis for income and gift tax purposes

    Efficient fiduciary accounting

    Option: Attach receipts list to trust document for all receipts of trust

    Tangible Personal Property may be h

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