Check This List Before You Check Out

Erskine Company the Post 2010 Tax Act Checklist April 15, 2011


This blog is entering a new stage.  I have been soliciting guest posts and some have come in..  I have some promises too.  You know who you are, I won't forget.  I am very gratified to have as my first guest blogger, Matthew F. Erskine

Matthew Erskine is the managing partner of this fourth generation law firm. He focuses his estate planning and trust services practice on serving business owners, professionals, individuals, families, collectors, and inheritors of significant assets. Helping his clients and their families achieve their goals by providing customized solutions. Matt carries on his family’s tradition of integrity, continuity, and service.


Who needs a review of their Estate Plan due to the New Tax Laws?

All clients should have their estate plan reviewed if:

1. Their net worth is $3.5 million ($7 million for a couple) or higher,

2. They own stock or other interest in a closely held company,

3. They own a significant amount of artwork, collectibles, commercial real estate, legacy real estate compounds or other unique assets,

4. They own an interest in a Family Limited Partnership or Family Limited Liability Company, or

5. They may inherit any of these assets.

The Questions to ask:

1. Is the estate plan drafted for maximum flexibility?

a. Look for either a large QTIP or Clayton QTIP election being allowed in the estate tax return,

b. Look for a disinterested independent trustee who has broad powers to distribute income, principal, powers of appointment and to terminate superfluous trusts as the tax laws change.

2. Is the possible use of disclaimers outlined?

a. Does this provide a “backstop” to allow changes to the planning due to changes in the tax laws?

3. Has the $5 Million Reunified Exemption been locked in during 2011 and 2012?

a. Have outright gifts been discussed, either in trust or otherwise?

b. For those reluctant to give away property, have Retained Interest Discretionary Income Trust and Reciprocal Spousal Benefits Trust been discussed?

c. Have Health Education Endowment Trusts and CLATs been discussed to supplement outright gifts in excess of the $5 million?

4. Is there a separate plan for significant unique assets?

a. Is there a management plan and succession plan for collections, real estate and family owned companies?

5. Have FLPs and FLLCs that generate a discount been terminated?

a. Terminate before proposal of disallowance of discounting of fractional interests in FLP of passive investments is likely.

6. Have Discounted Gifts of Tangible Property and Real Estate been considered?

If “no” is the Answer to any of these, then a full Estate Plan review should take place.

For more insight into this and other areas be sure to check out Matt's blog.


I will be continuing with my Monday, Wednesday, Friday committment although I think I will be putting up a lot more as I have a large backlog.  Guest posts will go up on days other than Monday, Wednesday or Friday.