Attorney Perry Ganz and Larry Schwartz, CPA and Managing Director at Tonneson & Co., teamed up to present a panel discussion, "Estate Planning in an Income Tax Planning World" in Wellesley, MA on Januray 28, 2016.
How to Kill an Irrevocable Trust
Ken Brier was pleased to be quoted in the first paragraph of an article published in the June 23, 2013 issue of Forbes titled Not So Irrevocable - What to do if your trust has stopped making sense. It addresses an increasingly prominent planning issue. Click here to read
Listen to Ken Brier's interview on the "Radio Entrepreneurs" show which was broadcast over local stations on May 15, 2012. Ken discussed why 2012 presents an extraordinary opportunity for wealthy folks -- and even moderately wealthy folks -- to make lifetime gifts and to hedge against tax changes, and on how one can build in a "safety valve" to maintain access to gifted funds.
Analysis of Mitt Romney’s Tax Returns.
Ken Brier was quoted in the Wall Street Journal, The Boston Globe and Bloomberg Businessnews on January 24 & 25, 2012, about Mitt Romney’s release of his 2010 tax returns. He reviewed Romney's returns for his private foundation and "blind trusts" and what appears to be an intentionally defective grantor trust, as well as his personal return. Mr. Brier stated that they “have every appearance of being squeaky clean. While Romney was helped by tax laws, he does not appear to have aggressively pursued shelters and other strategies to cut his tax bill.”
Mr. Brier was also interviewed by WBUR’s Business and Technology Reporter Curt Nickisch. In that interview Mr. Brier stated that it’s telling to see what’s not in Romney’s returns. “Even though Romney listed more than $300,000 in speaker’s fees, he hardly itemized any deductions off of that self-employment income. Sure, usually people who have their own business, even as a speaker and author, deduct everything that they possibly can -- some stationery, some postage. A lot of people would have a home office or entertainment [expenses]. [Romney has] none of that.”
Gift Planning With Estate Tax in Flux.
Kenneth P. Brier was quoted on September 20, 2010 in a special Wealth Advisor Section of the Wall Street Journal in an article entitled “What You Should Do Now.” The article contained recommendations from several advisers with practical planning advice in the face of this year’s estate-tax uncertainty. Mr. Brier suggests that 2010 may be an especially advantageous year for making substantial gifts, especially to grandchildren. But he warns against complications involving the generation-skipping tax, suggesting that generation-skipping gifts be made this year outright, and not in trust, if at all feasible. To the extent that gifts are still burdened with tax uncertainty, he suggests a structure that will serve to postpone the time when it is necessary to irrevocably decide how to treat the gifts for gift and GST tax purposes. The entire article may be viewed on the Wall Street Journal website.
Ken Brier authored a featured article for the Winter 2010 edition of Sumnews, published by the Massachusetts Society of Certified Public Accountants. The entire article may be viewed here.
Boutique Professional Firms.
Ken Brier was featured in an article in the December 2008/ January 2009 edition of Private Wealth magazine. The article was titled “Working Small, Thinking Big – These financial professionals left lucrative jobs at large firms and found happiness working at small boutiques.” He was quoted as saying “Leaving the big firm is like jumping off the cliff. [You] hope the parachute is going to hold.” He indicated that his parachute has held well. “There’s a growing demand for this kind of practice in the suburbs and we’re still close to Boston.”
Estate Tax Developments
Perry Ganz was quoted in the April 5, 2007, issue of The Wall Street Journal. The articles was titled "Estate Taxes Flummox Planners" and it discussed the recent changes in the tax law and how those changes are creating confusion for estate planners. The entire article may be viewed here.
Family Limited Partnership Developments.
Ken Brier was quoted in the August, 2004, issue of Fidelity+ concerning family limited partnerships (FLPs), a longstanding tool of estate planners. "Since FLPs can accomplish a number of different and important goals for families, they've come to be thought of as the 'Swiss army knife' of estate planning," Mr. Brier told Fidelity+. However, the recent Strangi decision has caused some estate planners to call the future of FLPs into question as a tool to minimize estate and gift taxes. The Tax Court held that Albert Strangi had effectively retained so much control over his FLP's assets that those assets could be counted as part of his estate. Strangi does inject a note of caution into the mix. "This Strangi decision may not hold up in appeals court, but for now we've got to plan accordingly," Mr. Brier said. "That may mean passing control of the FLP to the founder's spouse or to a trusted third party, or maybe even setting up a different trust to be the general partner to prove that the founder isn't the person in control. There should be pro-rata distributions of income, if only occasionally, so that minority partners are deemed to have a valuable current ownership interest. And founders should be cautioned against putting all of their assets into the FLP, the way Strangi did, so that they'll need to rely upon the FLP's assets to cover their personal living expenses." Nevertheless, Brier said he did see some grounds for optimism in the more recent Kimbell case, which undermined the most controversial aspects of the Tax Court's ruling in Strangi. "Kimbell has provided reassurance that FLPs, if structured and operated properly, can withstand challenge from the IRS."
Medical Privacy Law Problems.
Ken Brier was quoted in the May 31, 2004 issue of Business Week concerning the appointment of health-care proxies. Since the recent issuance of medical privacy regulations under a 1996 health insurance law, hospitals and physicians have become justifiably reluctant to disclose basic medical information, even the information needed to empower a proxy to make life and death decisions for the patient. To address this issue, Mr. Brier suggested that clients sign a separate document authorizing the release of information covered by the Health Insurance Portability & Accountability Act and adding a specific sentence to that effect in their health care proxy document.
Tightening of IRS Installment Payment Plan.
Ken Brier was quoted in the April 18, 2003 issue of Business Week regarding changes in the IRS's installment option for paying off the estate tax on business interests. Until recently, the IRS made generous "loans" to the heirs of entrepreneurs so that they could pay their taxes without selling the small business. However, the IRS rarely held security on these installment plans, leading to millions of dollars of defaulted liabilities. Consequently, the IRS now is requiring a lien on the family business (or other asset) as a condition of the installment plan. Mr. Brier still thinks the installment plan is often the best option: In some cases, "there's no other way to pay the taxes without a fire sale," he told Business Week.
Split-Dollar Insurance and Public Companies.
Ken Brier was quoted in the November 11, 2002 issue of Fortune Magazine regarding "split dollar deals," an arrangement whereby a company pays a portion of an employee's insurance premium; the employee then uses part of the money built up tax-free in the policy to reimburse the company upon his retirement. But now many legal analysts believe that many of these deals violate the Sarbanes-Oxley Corporate Responsibility Act, which bans "extensions of credit in the form of a personal loan" to employees of public companies. Mr. Brier doubted that the split dollar plan would continue to be written under conditions of such uncertainty. "It's a hell of a lot simpler to just pay executives more and let them buy their own insurance," he suggested.
Effect of Estate Tax Phaseout on FLPs.
Ken Brier was quoted in the July 1, 2002 issue of Financial Planning Interactive concerning the effect of the 2001 tax law, phasing out the federal estate tax, on the use of family limited partnerships, a vehicle that individuals use toward a variety of ends, including limiting their estate tax liability. "The 2001 tax law cuts both ways," Mr. Brier commented. "Some factors have favored the creation of FLPs while others reduce their appeal. Moreover, in some case we're now using limited liability companies (LLCs) instead of family limited partnerships."
Effect of Estate Tax Phaseout on Gift Strategies.
Ken Brier was quoted in the June 13, 2002 Wall Street Journal concerning the difficulty of smart estate planning under new tax law. The Bush tax cuts of 2001 provided for the estate tax to gradually diminish throughout the decade, culminating in its abolition in 2010 - but only until 2011, when it will re-emerge at the old rates. Some observers doubt that Congress will allow this to happen, but instead re-impose the estate tax on large estates only. In this state of uncertainty, making a taxable gift, in excess of the lifetime gift tax exemption of $1 million, presents a substantial gamble, when it is possible that at death there will be no estate taxes at all. "It would be a tragic waste to pay gift tax if you could just live a few years and avoid the whole thing," Mr. Brier said.
Section 529 Plans.
Ken Brier was quoted in the February 11, 2002 Wall Street Journal regarding a new type of college savings account - the 529 plan. More and more financial advisers have been looking to 529s as a method for decreasing estate tax liability since 2001, when the new tax law made withdrawals from 529s tax-free when used for college expenses. Many estate planners see many opportunities in this provision to shield their clients from tax liabilities. "We have only just begun to see variations on the theme," Mr. Brier commented. He expected to see many new planning ideas develop around 529s in the future