Section of Real Property, Trust and Estate Law: TRUST AND ESTATE BUSINESS PLANNING GROUP

TRUST AND ESTATE BUSINESS PLANNING GROUP


TRUST AND ESTATE BUSINESS PLANNING GROUP
WHO WE ARE/MONTHLY PHONE CONFERENCE ABA RPTE BUSINESS PLANNING GROUP-WHO WE ARE: The Business Planning Group of committees covers choice of entity, estate planning, and estate administration for clients who own business entities or interests in farms or ranches. The entities may be active businesses or formed to hold investments. Entities include partnerships (general, limited, and/or limited liability), limited liability companies, and corporations (including those with an "S" election in place). MONTHLY GROUP PHONE CONFERENCE-PLEASE JOIN US, ALL ARE WELCOME! THIRD WEDNESDAY OF EACH MONTH Please join our toll-free calls the third Wednesday of the month at 1:00 Eastern, noon Central, 11:00 Mountain, and 10:00 Pacific time. Reminders and cancellations are sent to members of the Business Planning Group and its committees (Business Investment Entities, Partnerships, LLC's, and Corporations & Estate Planning and Administration for Business Owners, Farmers and Ranchers) generally a few days before the call. We will discuss current developments or practical ways members handle issues that arise in this area. Please sign up for the Group/Committee to receive confirmation of the time and call-in instructions shortly before the call. This conference uses a toll-free number with no obligation to you. Join our calls the first Wednesday of each month. We will e-mail the call in number and password a few days for the conference call. *NEXT BUSINESS PLANNING GROUP CONFERENCE CALL* Wednesday, May 15, 12:00 – 1:00 PM Central Robert Nemzin (Butzel Long) and other presenters from the Business Planning Group will provide an overview of the BPG programing from the RPTE Spring Symposia in Washington, DC, including a discussion of the pitfalls of using business interests in charitable planning (David Naples and Dan McCarthy) and special issues to consider in business succession planning (Steve Gorin). Time permitting, we will also have a discussion related to TAM 201317010, the TAM discussing a trustee’s material participation related to the passive activity loss rules *Hugh F. Drake, Chair, Business Planning Group* JOIN US . . . Would you like to join our Business Planning Group Open Chat List Serve? Email requests to bielawsa@staff.abanet.org. Please include your ABA ID.

BUSINESS PLANNING GROUP-POINTS OF INTEREST

RECENT PRESENTATIONS

ABA RPTE Business Planning Group Live Teleconference: "S Corporation Tricks, Traps and Solutions".

On February 7, 2011, Steven B. Gorin, Christopher R. Hoyt, Daniel H. McCarthy, and Amber K. Quintal presented an ABA teleconference on the topic: "S Corporation Tricks, Traps and Solutions".

RECENT GROUP PROJECTS

Business Planning Group Task Force-Comments to Alternate Valuation Proposed Regulations Section 20,2032-1(f)(1)

In May of 2008, the Business Planning Group assembled a task force to comment on the Alternate Valuation Proposed Regulations under ? 20.2032-1(f)(1). The task force completed its work and submitted its comments to the IRS on July 18, 2008. View the comments here. If anyone has any questions about either the task force or the comments, please contact the task force co-chairs: William S. Forsberg at (612) 335-1413 william.forsberg@leonard.com, and Hugh Drake at (217) 544-8491 Hdrake@bhslaw.com. Other members of the task force were Douglas W. Stein, Steven B. Gorin, Lisa M. Rico, Darren Wallace and Daniel McCarthy. Lou Mezzullo was the task force COGS reviewer.

Business Planning Group Comments to Notice 2007-90

In 2007 the Business Planning Group assembled a task force to comment on IRS Notice 2007-90, which dealt with security under IRC Section 6166-payment of estate tax in installments. The comments were submitted to the IRS on January 14, 2008. Click below to access the comments submitted.

January 14, 2008---CLICK HERE FOR COMMENTS

Business Planning Group Comments to IRS Regarding Appraiser Penalty Provisions

New Code Section 6695A provides for new appraiser penalties, but the scope of the provisions is unclear. A task force of the Business Planning Group reviewed the issues and submitted comments to the Service setting out the uncertainties and requesting clarification -- February 14, 2007 -- CLICK HERE FOR FULL TEXT OF COMMENTS

OTHER ITEMS OF INTEREST

ACTEC SHAREHOLDERS AGREEMENT FORM

The American College of Trust & Estate Counsel (ACTEC) has granted us permission to publish on our web page its sample shareholder agreement and related commentary. Both of these are intended as tools to help a competent tax and business lawyer raise issues; they are not intended as a complete form or a complete research resource. Please note the publication dates and be cautioned accordingly. PLEASE SEE CASE ANALYSES AND RESOURCES BELOW FOR ACTEC SHAREHOLDERS AGREEMENT MATERIAL

2012 BUSINESS PLANNING GROUP UPCOMING EVENTS

Committee Events

2012 JOINT FALL CLE MEETING
September 14, 2012 - September 15, 2012

BELOW ARE THE BUSINESS PLANNING GROUP'S AND THE TAXATION SECTION'S CLOSELY HELD BUSINESSES COMMITTEE'S JOINT FALL CLE PROGRAM TOPICS

Location: Boston, MA

Date and Time: Friday, September 14, 2012. Time: 8:30 a.m. - 5:30 p.m.

MORNING SESSION

8:30 am - 9:00 am Hot Topics

Panelists: Robert M. Nemzin, Butzel Long, PC, Bloomfield Hills, MI, Karen Sandler Steinert, Fredrikson & Byron, PA, Minneapolis, MN

9:00 am - 10:10 am

Structuring Buyouts for Retiring Professionals

This panel will address the many complexities involved with buyouts of retiring professionals in closely held businesses. Along with providing advice and recommendations on the practical issues that can arise in these buyouts, the panel will discuss valuation issues involved in determining the buyout price; the advantages and disadvantages of the varying forms used to structure the buyout; and the income tax and estate tax issues that must be addressed in the buyout transaction.

Panelists: Daniel McCarthy, The Blum Firm, P.C., Fort Worth, TX; Steven Gorin, Thompson Coburn, LLP, St. Louis, MO; Robert Turnipseed, Armbrecht Jackson, LLP, Mobile, AL; William Prescott, Wickens, Herzer, Panza, Cook & Batista, Avon, OH

10:20 am – 11:30 am

Issues in Dividing Up and Transferring Property Out of Professional Corporations and Partnerships

In a continuation of the prior discussion, this panel will discuss the practical and tax issues involved with the breakup and division of a professional company and related businesses, including Section 355 issues; how to divide or distribute corporate and partnership property; best ways to set up and fund separate partnerships or corporations for the professionals, and other key issues involved with the division of a professional company and related businesses.

Panelists: Steven Gorin, Thompson Coburn, LLP, St. Louis, MO; Daniel McCarthy, The Blum Firm, P.C., Fort Worth, TX; Robert Turnipseed, Armbrecht Jackson, LLP, Mobile, AL; William Prescott, Wickens, Herzer, Panza, Cook & Batista, Avon, OH

AFTERNOON SESSION

2:30 pm – 4:00 pm

Chapter 14 Overview with Planning Implications

Chapter 14 of the Internal Revenue Code has existed for over twenty years, yet many of the gift and estate tax provisions thereunder are still not well understood by trusts and estates professionals. This session will include a broad overview of the statutory provisions of Code Sections 2701 through 2704 and the policy reasons behind the often confounding special valuation rules that make up Chapter 14. In addition, the session will discuss several pitfalls that exist under these provisions as well as some Chapter 14 compliant planning possibilities that practitioners can use to their clients' advantage. Areas that the panel will discuss include: Pre and Post-Section 2701 preferred partnerships, "vertical slice" and "non-vertical slice" approaches to private investment fund carried interest planning, GRATs, QPRTs, Joint Purchases and Sales of Remainder Interests, Buy-Sell Agreements, Sales to Defective Grantor Trusts, Family Limited Partnership issues and more.

Moderator: Shelby Wilson, Berchem, Moses & Devlin, Westport, CT Panelists: N. Todd Angkatavanich, Withers Worldwide, New Haven, CT, William Forsberg, Leonard, Street & Deinard, Minneapolis, MN, Ivan Taback, Proskauer Rose, LLP, New York, NY

4:00 pm – 5:30 pm

Defined Values Clauses--How Simple Can They Be After Wandry?

Defined value transfers (which operate very similar to testamentary formula marital deduction clauses) can be helpful in limiting gift tax exposure on the lifetime transfer of hard to value assets. Five cases have recognized the validity of “formula allocation clauses” that allocated a dollar value portion of transferred assets to family members and the excess value of the transferred assets passed to charity. The first four involved "formula allocation clauses," where any excess value passed to charity, while the fifth, Wandry, recognized a simple formula transfer to family members of a specified dollar value worth of units in an LLC--a true "defined value" clause. That approach is much simpler, but this Tax Court Memo case stands in contrast to the 60-year old Procter case that rejected a similar clause. The panel will explore this background and where we go from here in designing and using lifetime defined value transfers.

Panelists: Edward Koren, Holland & Knight, Tampa, FL, Steve R. Akers, Bessemer Trust, Dallas, TX.

Non-Tax Issues in Business Succession Planning
September 20, 2012

On September 20, 2012 at 1 pm - 2:30 pm ET, Edward Koren, Holland & Knight, Tampa, Florida and David M. Naples, Leonard Street & Deinard PA, Minneapolis, MN will present a live ABA teleconference on the practical and the personal issues involved in the planning for the succession of a closely held business. Matters to be discussed include such topics as choosing the right procedure for selecting the successor, drafting shareholder agreements, identifying and then handling family concerns and conflicts, addressing issues with co-owners, developing plans for funding the succession plan, altering the business structure to meet the owner’s goals or to take care of inactive family members, potential conflicts between a trustee's trust law duties and business law duties, and many other topics.

GOTCHA Transactions in Formation, Structure and Conveyance of Business Interests
October 2, 2012

On October 2, 2012 at 1:00 pm - 2:30 pm ET, Steve Gorin, Thompson Coburn, LLP, St. Louis, MO, Daniel McCarthy, The Blum Firm, P.C., Fort Worth, TX,and William I. Sanderson, McGuireWoods LLP, Richmond, VA will present a live ABA teleconference "GOTCHA Transactions in Formation, Structure and Conveyance of Business Interests".