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Private Trust

MCF Private Trust White Paper

november 2018


Asset Protection: The Path to South Dakota

One of the most innovative new estate planning strategies for protecting the assets of wealthy clients involves the use of self settled trusts with trust administration in South Dakota. This growing trend for South Dakota asset protection strategies helps high net worth individuals mitigate the risk to their wealth without going offshore.

Asset protection is a set of legal techniques and a body of statutory and common laws aimed to protect the assets of individuals. The goal of asset protection planning is to insulate assets from claims of creditors without concealment or tax evasion.

FULL ARTICLE

Trust Connection - A Monthly Report on Trust News and Information

november 2018


Getting Advice During a Life-Changing Illness

The aging of America, combined with advances in medicine, is having the anomalous result of people who are living longer with chronic and sometimes terminal illnesses. People are living longer, but with diseases that might have killed them 40 years ago.

While health situations may change suddenly and dramatically, the counsel you or your loved ones receive during these times should be steadfast and mindful. Financial advisors can aid in at least two ways: First, provide guidance with respect to the financial needs that are the inevitable result of the transition from good health to chronic illness; and second, provide emotional support for physical, mental, and emotional changes that may occur.

FULL ARTICLE

MCF Private Trust White Paper

october 2018


Show Me The Money: Investing for Different Types of Trusts

 Here we will examine fiduciary investing, its common law rules, expansion or limitation by the document, and changes under state law to glean insights into issues affecting the investment decisions, documentation, and areas of liability. Using the Uniform Prudent Investor Act as a guide, we will examine the thought process, considerations, documentation and ongoing review of challenging investment decisions, including, Concentrations, Initial assets, Delegation, and Factors to consider.

Investing is central to the role of a fiduciary. Regulation 9 defines fiduciary roles largely using the investment discretion as the central tenet. Without a fiduciary relationship, investments fall to the transactional, caveat emptor, brokerage model. Neither is better nor worse, but they are decidedly different, and that is the point.

FULL ARTICLE

Trust Connection - A Monthly Report on Trust News and Information

october 2018


Silence May be Golden

While trusts play an integral part in transferring assets to future generations, they may present a potential problem with confidentiality. 

Consider the case of a father who created a $22 million irrevocable trust for the benefit of his 17-year-old twin daughters. The grantor happened to reside in Oregon, which is a state that has adopted the Uniform Trust Code (UTC), a comprehensive set of laws governing the creation and administration of trusts that has been adopted by more than 30 states. Each state may adopt it as written or with modifications. The UTC requires that the trustee of an irrevocable trust notify qualified beneficiaries of the existence of the trust, furnish them with a copy of the trust document and provide a statement — at least annually – of the trust assets and transactions. Even if the grantor has language in the trust document detailing when the beneficiaries should receive notice and accountings of the trust, that desire is overridden by the UTC.

FULL ARTICLE

MCF Private Trust White Paper

September 2018


Charitable Giving Strategies and Opportunities

People have a number of different reasons for charitable giving. Some give to support their personal values, such as specific interests, others due to concerns about a legacy, and some with a view to philanthropic intent combined with estate planning opportunities. Regardless of the intent, though, charitable giving is a highly personal decision, and your clients should discuss their plans not only with their families and loved ones, but also with their financial, tax, and legal advisors. In this newsletter, we discuss how the recently passed Tax Cuts and Jobs Act (the “Act”) dramatically alters the income tax landscape for your clients’ philanthropic practices, and review two of the last remaining true tax shelters available.

FULL ARTICLE

Trust Connection - A Monthly Report on Trust News and Information

september 2018


Settling Estates with Trusts – An Overview

There are a myriad of reasons a trust is a practical estate planning tool. For many clients, a resounding reason is avoiding probate in the process of distributing assets after the grantor’s death. While probate could be considered a useful alternative in unique cases or in certain jurisdictions, a trust commonly offers a high degree of privacy with quicker execution at lower costs. In addition, rather than having only an Attorney-In-Fact under a Power of Attorney possess the authority to immediately deal with financial issues when the grantor becomes incapacitated, which can often be problematic, a trustee has the full authority, at the instant of incapacity, to manage the assets in a trust.

FULL ARTICLE

Trust Connection - A Monthly Report on Trust News and Information

August 2018


The Real (and Often Overlooked) Estate Planning Issues

What is your primary goal with estate planning? When asked, you may answer with this: “To pay as little tax as possible.” After the Tax Cuts and Jobs Act of 2017, less than 1 in 10,000 decedents’ estates, or 0.0001%, will owe federal estate taxes. Unless everything is left to charity, taxation should still be addressed, but the emphasis should always be on who your estate plan will benefit and how will it be executed.

While it can be a difficult conversation, your estate planner can help you determine how family dynamics could impact assets left to heirs. When it comes to addressing family dynamics in estate planning, there are three key issues: 1.) The grantor’s desired use of the funds by the heirs; 2.)
The heirs’ ability to comply with those desires; and 3.) Protection from outside threats such as lawsuits, creditors, or divorce.

FULL ARTICLE

MCF Private Trust White Paper

August 2018


Creating and Reviewing ILITs

The irrevocable life insurance trust (ILIT) has been a useful estate planning tool for several generations. However, given the constantly changing tax environment and the developments in both estate planning techniques and insurance products, it is important to periodically review your client’s ILIT to confirm that the rationale for creating the trust is still valid, that the trust as written still meets the needs and expectations of the client, and that the underlying insurance policy is performing in the manner contemplated at purchase. New clients may also have a need for an ILIT that needs to be discussed fully prior to the drafting of the instrument and purchase of the life insurance product. Here are some thoughts to consider in conducting such a review.

FULL ARTICLE

Trust Connection - A Monthly Report on Trust News and Information

JUly 2018


The Number One Mistake People Make in Estate Plans

Estate planning is complex, but the most common mistake is quite simple – coordinating the title of assets with the plan. And estate planners agree this is a consistent theme. It can be disturbing how often the assets do not coordinate with the plan, sometimes to unsettling results.

This is perhaps also a contributing reason that many estate planning attorneys spend as much or more time handling family settlements after death than actually planning. With all the complexities of property law, tax law combined with the fiduciary responsibilities and choice of executor, trustee, and investment management, having the root of the plan disconnected by a gap in titling is unfortunate.

FULL ARTICLE

MCF Private Trust White Paper

July 2018


What do you DO anyway? - Role of a Trustee

Whether individual family member or professional corporate trustee, the roles and responsibilities of a trustee are the same and each option comes with its own risks. Not everyone is aware of the extent, importance and liability of the job. Understanding the responsibilities are important in order to help clients decide whether to take on the extensive responsibilities and liabilities of an individual trustee, or to use a corporate trustee and let the experts administer the trust.

Full Article


Trust Connection - A Monthly Report on Trust News and Information

JUNE 2018


What You Need to Know about the Tax Cuts and Jobs Act

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act, a $1.5 trillion package that will significantly reform both individual and corporate income taxation. According to the Tax Foundation, the act will spur an additional $1 trillion in federal revenues from economic growth, increase Gross Domestic Product (GDP) by an average of 0.29 percent over the next decade, and lead to a 1.1 percent increase in after-tax income of all taxpayers.

Full Article