Estate Planning Law Update The Law and Planning Considerations Presented by: Anderson, Dorn & Rader, Ltd. Legacy and Wealth Planning Attorneys Gerald M. Dorn, Esq.
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Estate Planning Law Update
The Law and Planning Considerations
Presented by:
Anderson, Dorn &
Rader, Ltd.
Legacy and Wealth Planning Attorneys
Gerald M. Dorn, Esq.
Gerald (“Jerry”) M. Dorn, Esq. Managing Shareholder at Anderson, Dorn &
Rader, Ltd. (shareholder since 1997)
B.A. in Business Admin. with high honors, University of San Diego
J. D., Cal. Western School of Law with recognition in Who’s Who Among American Law Students
Certified Specialist in Estate Planning Law by the National Association of Estate Planning Councils
Fellow of the American Academy of Estate Planning Attorneys
Highest rating among peers and local judges (Top 5%)
Author and lecturer on numerous estate, tax and asset protection planning topics
Member of State Bars of Nevada and California
American Taxpayer Relief Act of 2012
Federal Estate & Gift Taxes
2015 Adjusted Federal Estate and Gift Tax
Exclusion Amount
Unmarried - $5,430,000
Married - $10,860,000
2016 Projected Exclusion Amount
$5,450,000
$10,900,000
Rate is 40%
American Taxpayer Relief Act of 2012
Federal Generation-Skipping Transfer Tax
Applies to transfers to beneficiaries who are 2
or more generations below you
Grandchildren, Great-Grandchildren, etc.
Grandnieces and Grandnephews
Unrelated beneficiaries who are 37.5 years
younger than you
2015 Adjusted Generation-Skipping Transfer
Tax Exclusion Amount
Unmarried - $5,430,000
Married - $10,860,000
Rate is 40%
American Taxpayer Relief Act of 2012
Federal Generation-Skipping Transfer Tax
2016 Projected Exclusion Amount
$5,450,000
$10,900,000
American Taxpayer Relief Act of 2012
2015 Adjusted Annual Gift Tax Exclusion
$14,000 per donee
2016 Projected Annual Exclusion Amount
$14,000 per donee
Portability
Surviving spouse may elect to use deceased spouse’s unused estate and gift tax exclusion amounts
Election must be made on the deceased spouse’s timely filed estate tax return
Not applicable to deceased spouse’s unused generation-skipping transfer tax exclusion amount
Not indexed for inflation
Planning Considerations
Married Couples
Applies to all married clients with Living Trusts created before 2013
Need to review estate tax planning provisions in the Living Trust
Reconsider the A/B Trust Planning
What is A/B Trust Planning?
A/B Trust Planning
Bill & Mary are the
Trustors and Co-Trustees
First Death
(Revocable) “A”
$350,000
(Irrevocable) “B”
$350,000
John Susan
Second Death
Mary is sole Trustee
and sole Beneficiary
INCOME
PRINCIPAL for: Health, Education,
Maintenance, &
Support
A/B Trust
Above ground
Below ground
A/B Trust Planning
Bill & Mary are the
Trustors and Co-Trustees
First Death
(Revocable) “A”
$350,000
(Irrevocable) “B”
$350,000
John Susan
Second Death
Mary is sole Trustee
and sole Beneficiary
INCOME
PRINCIPAL for: Health, Education,
Maintenance, &
Support
Considerations for Married Couples With Estates Under $5,430,000
Simple Married Trust No A/B provisions
All trust assets pass in trust to the surviving spouse.
Disclaimer A/B Trust Planning Funding of B Trust is in discretion of the
surviving spouse
Advantages Ease of administration at first spouse’s death
Lower administrative costs (attorney’s fees, appraisal fees, accountant's fees, etc.)
Considerations for Married Couples With Estates Under $5,430,000
Risks of No A/B or Discretionary (Disclaimer) A/B Planning Remarriage
Assets are exposed to the creditor’s of the surviving spouse (i.e., lawsuits and divorce if surviving spouse remarries)
Solution
A/B and remarriage provisions
Considerations for Married Couples With Estates Over $5,430,000
Simple Married Trust (No A/B Provisions)
Disclaimer A/B Trust Planning
Mandatory A/B or A/B/C Trust
Mandatory A/C Trust Electing Portability
Portability Followed by Gift by Surviving Spouse to an IGIVE Trust
Creditor Protection For Inherited IRAs
U.S. Supreme Court case Clark v. Rameker (2014)
Inherited IRAs are not considered “retirement accounts” under federal bankruptcy law
Inheritors can’t put additional funds into the account
Inheritors can take money out at any time without penalty
Exemption does not apply and creditors may attach inherited IRAs!
Planning for Same Sex Married Couples
US v. Windsor (2013)
US Supreme Court held that the federal definition of marriage under DOMA unconstitutional
Did not address the powers granted to the states to define marriage or other unions
Planning for Same Sex Married Couples
Obergefell v. Hodges (2015)
US Supreme Court held states cannot prohibit the issuing of marriage licenses to same sex couples and must recognize same sex marriages performed out-of-state
Same sex couples need to review their plans and consider new planning opportunities and issues resulting from these cases
Nevada Trust Law
Best state in the country to protect against a beneficiary’s creditors reaching Access and Sentry Trusts!
Divorcing spouses
IRS liens
Personal injury lawsuits
New Directed Trust Legislation
Trust Protectors
Trust Advisors
Decanting Legislation – can amend irrevocable trusts!
Nevada Trust Law
New 365 year Rule Against Perpetuities
New accounting rules applicable to Trustee’s of irrevocable trusts
Estate Planning Law is Dynamic
You should have your plan reviewed every two years
Coincides with changes that occur with each legislative session in Nevada
New tax law considerations generally arise at least every two years
Takes into account your ever changing family circumstances
Come see us for
a Trust Review!
Anderson, Dorn & Rader, Ltd.
“Helping families preserve their real wealth and legacy.”
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