Archive for the ‘Thursday Reports’ Category

The Thursday Report – 08.06.15 – New York Taxes, FINRA & Mollaxes

Posted on: August 6th, 2015

New York Taxes Disregarded LLC Owning A Non-Resident’s Real Estate on Death

FINRAs to the Left, FINRAs to the Right

Disclaimer of Trust Assets to a Charity

Richard Connolly’s World – Avoiding Post-Death Financial Woes

Thoughtful Corner – Improving Your Mode of Thinking – Three Important Suggestions That Work

Look No Further for Professional Acceleration

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

New York Taxes Disregarded LLC Owning a
Non-Resident’s Real Estate on Death

Our friends and prolific writers Jonathan Gopman, Michael Sneeringer, and Eric Olsen wrote a pertinent review of the opinion provided by the New York State Department of Taxation and Finance regarding a membership interest in an SMLLC that owned a condominium for Steve Leimberg’s Estate Planning Newsletter.

Below are excerpts of their article.  For the entire article, you can click here.

Executive Summary:

The New York State Department of Taxation and Finance (the “Department”) recently opined that a membership interest in a single-member LLC (“SMLLC”) owning a New York condominium is real property subject to New York State “estate tax.”  This conclusion is based upon and applies to SMLLCs that are “disregarded” for Federal income tax purposes.

Facts:

In Advisory Opinion TSB-A-15(1)M, the Department responded to a New York resident (“Petitioner”) who contemplated contributing his New York condominium to a disregarded SMLLC and then moving to another state.  The Petitioner intended to remain the sole owner of the SMLLC for the remainder of his life and to reside outside of New York until his death.  The Petitioner asked whether the SMLLC is “intangible property” for estate tax purposes and would therefore not be treated as real property for New York State estate tax purposes.  The Department, in considering the SMLLC’s sole ownership, reasoned that the assets and activities of a disregarded SMLLC should be treated as the assets and activities of the SMLLC’s sole member/owner.  Accordingly, the condominium held by the SMLLC would be treated as real property held by the Petitioner for New York State estate tax purposes.

Comment:

Analysis

New York State imposes estate tax on the transfer by the estate of a nonresident decedent of real property and tangible personal property located in New York.[1]  In general, the transfer of a New York condominium by the estate of a nonresident decedent is subject to estate tax.[2]  New York real property may be held by a corporation or partnership; however, the interest in such entity (i.e., the corporate stock or partnership interest) constitutes intangible property.[3]  New York does not impose estate tax on intangible property held by nonresidents, even if such property is located in New York.[4]  Accordingly, the New York State estate tax is not imposed on the transfer by the estate of a nonresident decedent of an interest in a corporation or partnership that holds New York real estate.

Under U.S. Treasury Regulations, the tax classification of a business entity is determined by its number of owners and by an election, if any, made by the entity.  A business entity with only one owner is classified as either a disregarded entity or a corporation.[5]  As a default, a SMLLC is disregarded as an entity separate from its sole member/owner and the tax attributes of the SMLLC are imputed to its sole member/owner.[6]  Alternatively, a SMLLC may file IRS Form 8832 (Entity Classification Election) to be classified as “an association and taxable as a corporation.”[7]  An LLC with two or more members (i.e., owners) is classified as either a partnership or a corporation.  As a default, a multimember LLC is treated as a partnership and its tax attributes pass through to its members.[8]  Alternatively, a multimember LLC may file Form 8832 to be classified as a corporation.[9]

The key take-away point is that applicable state law creates legal interests and property rights for federal tax purposes, while the federal revenue acts designate what interests or rights, so created, shall be taxed.[10] Although the check-the-box regulations authorize the proposed entities to be ignored for federal income tax purposes, nothing in the Code or regulations authorizes or mandates that those entities should be ignored for purposes of the federal estate, gift and generation-skipping transfer taxes.[11] Thus, a person with similar circumstances as the taxpayers in the Opinions, albeit one with an iron stomach, could take on the Department using the rationale articulated in Pierre, so long as New York continues to have N.Y. LLC Law § 601 on its books.

Possible Solutions Without Litigation

As noted above, one should be able to rely upon the decision in Pierre despite the Opinions issued by the Department. However, to avoid future protracted litigation, clients will demand an alternative. One way to avoid litigation is to have a partnership own the underlying condominium, whether a traditional partnership structuring with perhaps one or more limited partners and a general partner, or through the creation of an LLC making an election to be taxed as a partnership.

Partnerships and multiple-member LLCs have their own set of separate issues, such as dealing with other partners/members and filing a partnership income tax return annually. Especially in the case of owning a single condominium unit, why would anybody want to put up with such a headache? Additionally, while one could follow the Opinions and opt to simply create a SMLLC and make the election to have it taxed as a corporation, this would entail its own sort of problems due to the basis step-up issues involved with corporations.

Query whether the Opinions would differ if the taxpayer formed an LLC to serve as a 1% general partner of a limited partnership where the condominium transferee owned all of the limited partnership interests as the 99% partner? While the partnership is deemed not to exist under Federal law for income tax purposes, this result differs under the check-the-box regulations.  What would be the result if the taxpayer’s grantor trust is the 1% general partner? These variations still create an existing partnership for state law purposes.

Conclusion

In Advisory Opinion (TSB-A-15(1)M May 29, 2015), the Department narrowly addressed a specific estate tax inquiry as it related to the facts presented by the Petitioner.  Decisions regarding entity classification may have significant federal and state tax implications and filing requirements.  Accordingly, taxpayers should make such decisions in consultation with their professional advisors. 

Cite As:

LISI Estate Planning Newsletter #2330, (August 4, 2015) at http://www.leimbergservices.com. Copyright 2015 Leimberg Information Services, Inc. (LISI).

*************************************************
[1] N.Y. Tax Law § 960(a).
[2] N.Y. Real Prop. Law § 339-g.
[3] N.Y. Tax Law § 951-a(c).
[4] N.Y. Partnership Law § 51; Estate of Havemeyer, 17 N.Y. 2d 216 (1966).
[5] Treas. Reg. § 301.7701-2(a).
[6] Treas. Reg. § 301.7701-3(b)(1)(ii).
[7] Treas. Reg. § 301.7701-3(c)(1)(i).
[8] Treas. Reg. § 301.7701-3(b)(1)(i).
[9] Treas. Reg. § 301.7701-3(c)(1)(i).
[10] See e.g., Knight v. Comr., 115 T.C. 506 (2000); U.S. v. Bess, 357 U.S. 51 (1958); Morgan v. Comr., 309 U.S. 78 (1940); Aquilino v. U.S., 363 U.S. 509 (1960); Aldrich v. U.S., 346 F.2d 37 (1965); McGehee v. Comr., 260 F.2d 818 (1958); and TAM 199930013.
[11] Gopman, “Estate Planning with S Stock: the “Spreeze” Transaction,” 27 Est. Gft. & Tr. J. 155 (May 9, 2002).

FINRAs to the Left, FINRAs to the Right
by Alyssa Eberle, J.D.

Elderly Americans can call 1-844-57-HELPS (or 1-844-574-3577) for free advice.

FINRA is the congressionally ordained financial industry “self regulatory” agency that oversees investment licensee conduct, sets standard of practice protocols, and is otherwise considered to be the governing bodies in these areas.  FINRA has launched a number of programs to help consumers, although many believe that FINRA should more heavily regulate investment advisors as opposed to reaching out directly to consumers who may be being harmed by advisors and product choices that consumers are guided to that are not subject to fiduciary duty or disclosures.

While it is mostly for elderly Americans who are age 65 or older, anyone can use this hotline.  More about the situation is as follows:

Lawyers and financial advisors are becoming more exposed to cases in which heirs are facing hurdles in trying to gain access to a deceased loved one’s brokerage account. In some cases, heirs are not even permitted to see account statements.[1] This may cause problems, for example, when children with rights to the estate are attempting to access their deceased parent’s assets. While brokerage firms are under strict legal guidelines with regard to what and with whom information is shared, firms respond slowly to those that do meet the requirements and do not readily provide information to family members upon the death of an account holder.

Another issue that elderly investors face is the suitability of recommendations from advisors, some communications and sales practices could prove to be abusive and fraudulent.

In order to provide a solution to this problem, FINRA established the FINRA Securities Helpline for Seniors called HELPS. HELPS is a toll-free number that senior investors can call to get assistance from FINRA or raise concerns regarding brokerage accounts and other investments.

If a senior investor is struggling with questions about their brokerage account, FINRA’s hotline can help with: (1) achieving a better understanding of how to review investment portfolios and account statements; (2) raising concerns about the handling of a brokerage account; and (3) getting information about investor tools and resources from FINRA, including BrokerCheck®.[2]

Susan Axelrod, FINRA’s Executive Vice President for Regulatory Operations, stated the following regarding the helpline:

Protecting senior investors has been an important priority for FINRA for several years. Our goal in setting up this Helpline is to build on these efforts and provide an additional resource to senior investors. FINRA’s Helpline means that older investors are only a phone call away from getting help with questions or concerns they may have regarding their investments. FINRA staff will point seniors to educational tools that can help them better understand investing, savings, and investment products, as well as resources like BrokerCheck® that can provide valuable information about securities firms and financial professionals.[3]

It is important to address senior investor needs expeditiously, as they lack outside income and could have potential health complications and decreased mental capacity, which require immediate attention to their assets.  It is important for brokerage firms to take into consideration the age and life stage of the senior investor, and whether or not their heirs will require additional help in the future.

FINRA is hoping that HELPS provides assistance to senior investors as well as their heirs. Time will tell if HELPS coupled with the collaboration of estate planning attorneys will provide access to the deceased’s brokerage accounts without clogging the probate court system.

************************************************
[1] Matthias Rieker, The Hassle of Inheriting a Brokerage Account, The Wall Street Journal, July 10, 2015.
[2] FINRA Securities Helpline for Seniors – HELPS, available at www.finra.org/investors/finra-securities-helpline-seniors.
[3] FINRA Launches Toll-Free FINRA Securities Helpline for Seniors, April 20, 2015.

Disclaimer of Trust Assets to a Charity
by Kenneth J. Crotty, J.D., LL.M. and Alan S. Gassman, J.D., LL.M.

Have you considered allowing the disclaimer of trust assets to a charity where the grantor would like to see a donation but is not sure whether the beneficiary will agree or whether it may be best to pay the charity from income to receive an income tax deduction after the client’s death?

The following is a sample letter that you may want to share with a client considering this approach.  The language was developed by us to facilitate having trusts held for children and descendants be subject to disclaimer provisions that would allow the primary beneficiary (child) to direct the trustee to have a portion of the trust assets pass to one or more specific charities or to a donor advised fund designated by the client in his or her estate planning documents.

Dear [Client]:

            [CPA] asked about whether Mother, could use a disclaimer provision in her revocable trust to enable Daughter and Son to disclaim part of what would be their inheritance under the trusts being left by Mother, with the result that such disclaimed assets would pass to charity.

            To accomplish this, on Mother’s death, there might be a clause that would read as follows:

I would like to have up to $______________ transferred as a charitable devise to the __________ CHARITY FUND, but would like for the decision with respect to such devise to be made by my children, SON and DAUGHTER.

Therefore, to the extent that one or both of my children, SON or DAUGHTER, request the Trustees of any trust established for their primary benefit under this Trust Agreement make a disclaimer of assets otherwise passing into trust for such child of up to one-half of the amount listed above per child (1/2 of the amount stated in the paragraph above), the amounts and/or assets so disclaimed shall pass to the _______________ CHARITY FUND.  Such disclaimer must be made within 180 days of my date of death.

      To illustrate how this would work, let’s say that the charity is the Foundation To Support Thursday Reports, and that the maximum amount is $500,000.

         After Mother’s death, Daughter might decide to disclaim $100,000, and Son might decide to disclaim $250,000.  They will have nine months after Mother’s death to make this decision.

         As the result of the disclaimers, $100,000 that would have gone into a trust for Daughter would go to the Notable Charity, and $250,000 that would have gone into a trust for Son would go to the Notable Charity.

       Estate tax saved as the result of this would be expected to be 40% of $350,000, which is $140,000.

            The following clause, or language like it, would also be included.

To the extent that the disclaimer to charity by one child exceeds the disclaimer to charity by the other child, then the larger amount of estate tax attributable to the smaller or lack of disclaimer attributable to the one child will be charged against the share of that child.

By means of example, assume that the client (i) had authorized $500,000 to be devised as a charitable devise; (ii) DAUGHTER decided to disclaim $100,000; and (iii) SON decided to disclaim $250,000.  Further assume that as a result of the disclaimers, and assuming a 40% estate tax rate, disclaiming $350,000 saved $140,000 in estate tax ($100,000 + $250,000 = $350,000; $350,000 x 40% = $140,000).  Based on these assumptions, SON would have disclaimed $150,000 more than DAUGHTER.  The extra estate tax savings as a result of such disclaimer would be $60,000 ($250,000 – $100,000 = $150,000; $150,000 x 40% = $60,000).  As a result, the separate share established for the benefit of DAUGHTER would be reduced by $60,000.

        If Mother would like to give each child more flexibility as to what specific charity or charities their disclaimed amounts would go to, then she might name the Pinellas Community Foundation or the Community Foundation of Tampa Bay. These foundations are charities that basically receive dispositions, and then transfer the monies as requested by the family. Many local donors use the Community Foundation to get a tax deduction now, while having control over the investments and timing of the actual delivery of the intended funds to charity.

        Fidelity, Schwab, and other firms have similar donor advised charitable fund arrangements whereby they hold investments based upon the direction of a trustee or individual and can make distributions to charity when instructed to do so. The transfers of money to these funds will qualify for an income tax charitable deduction at the time of funding, notwithstanding that the actual end game charities may not receive distributions until years after the initial funding of the charitable account.

Best personal regards,

John Q. Thursday-Report

Richard Connolly’s World
Avoiding Post-Death Financial Woes

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with links to the articles.

This week, the first article of interest is “Money Advice for Wives Whose Husbands Die Suddenly” by Kerry Hannon. This article was featured on Forbes.com on June 19, 2015.

Richard’s description is as follows:

One third of women who become widows are younger than 65, according to the Women’s Institute for a Secure Retirement. The financial issues they’ll immediately confront go far beyond losing an income.

In the weeks following a husband’s death, a widow will be forced to make dozens of decisions, so she’ll need to get a grip on finances as quickly as possible. This article illustrates how to accomplish that, based on research and interviews with two ace financial planners.

Please click here to read this article in its entirety.

The second article of interest this week is entitled “Death, Taxes, and Your IRA. Ouch.” By Jonathan Clements. This article was featured in The Wall Street Journal on June 11, 2015.

Richard’s description is as follows:

Your death could be more taxing than you imagine.

Thanks to 2015’s $5.43 million federal estate-tax exclusion, perhaps just one out of 600 deaths this year will trigger federal estate taxes. Yet many heirs will face steep tax bills, partly because some states levy their own estate tax, but mostly because of the income taxes due on inherited retirement accounts.

All this is bad news for many Americans. For the typical household approaching retirement age, retirement accounts are the second-largest asset they own, after their home…

What should these investors do? This article highlights three key strategies that many folks ought to consider and two others that could make sense for some families.

Please click here to read this article in its entirety.

Thoughtful Corner
Problem Solving and Making a Decision

Introductory Quotes to Live By

“Concentrate on a fantastic future!”

It is very easy to get caught up in things from the past that may disappoint or be of concern, but what good does that do you? We live to make the most of the now and the future. Exciting and feasible goals and taking the proper steps to achieve them will bring a much better peace of mind. Can clients be nudged that way in the conference room? Absolutely!

“The problem is never the problem. The problem is that you don’t know how to think about the problem.”

“Problems analysis” is a process that many people are completely unaware of. The “problem” itself is usually not the real issue. The way the person looks at the situation is the problem.

If you take a few minutes to write down the obstacles that have caused the problem and possible solutions to each obstacle, you will often be amazed at how quickly the problem can be solved.

Discussing this brief written analysis with someone uninvolved with the situation will often provide a quick solution. Remember, your problem may just be an expense if it can be removed by spending some money.

Making a Decision
Narrow Down the Choices, Evaluate the Options, and Get On With it!

No great achievement ever occurred without a decision being made. Use the Ben Franklin Fork in the Road or Decision to Be Made Chart and make a list of all of the things that you have not decided and the detriment suffered as a result.

Alternatively, start an experiment – READY, FIRE, AIM – what did you hit? How did it go? You could also ask an Ouija board, flip a coin, whatever it takes to get on with it.

We, as advisors and planners, help clients make important decisions. Let’s not forget that the opportunities they have may justify risks and actions that they can afford to handle. We can encourage this with appropriate analysis of exposure and how to best protect from risk.

Yes, it is our job to warn them of risks and help reduce problems ahead, but let’s not get carried away. If the client has the passion and the wherewithal to make an intelligent choice, then let’s do what we can to help them.

No great achievement has occurred without risk and ambition; doing nothing in the face of an important decision is often the wrong move.

As Yogi Berra said, “When you come to the fork in the road, take it.” What can we do to help clients understand that inaction can be very harmful in a number of ways?

No guts, no glory!

Problem Solving Without Clutter

Are you giving your brain the opportunity to problem solve, invent, and enjoy social situations, or are you cluttering it with social media and texting as a matter of habit?

There are thousands of things to think about when you have time. Most highly successful individuals prioritize their thinking, and, in quiet moments, whether while driving, fishing, or standing in line for a coffee, are able to think through solutions to problems, mentally rehearse for meetings, conversations, or presentations, and can elect to originate or replay enjoyable, calming, or otherwise useful daydreaming sequences.

When standing in line for 10 minutes for a coffee, are you scouring through emails, looking at Facebook, and generally providing an active conscious clutter out of habit or the desire to be sociable, or are you solving client problems (that you can bill for!), enjoying a cool fantasy, or mentally rehearsing for an upcoming event?

When you have a big event coming up, you will want to consider making sure that you have first thought through the following:

  • Materials needed
  • Knowledge needed
  • Agenda
  • Goals for the meeting or event
  • Mental rehearsal time – thinking through what you are going to say and how you are going to answer any questions
  • Who to discuss the above with

The above has been excerpted from the Professional Acceleration Workshop Workbook, which can be purchased by clicking here.

Look No Further for Professional Acceleration

Are you interested in learning strategies for business relationships and techniques commonly used by successful professionals? Check out the Ave Maria School of Law Professional Acceleration Workshop on August 22, 2015, with Alan S. Gassman.  This is an eight-hour version of the five-hour program given at the University of Florida on May 30, 2015.

This workshop is open to all 3rd year law students, alumni, and experienced professionals who wish to enhance their professional and personal lives.

The interactive workshop will engage participants in conversations about personal goal setting, handling practical challenges and eliminating obstacles, client interactions, finding a work-life balance, and, most importantly, lunch is included.  The workshop is also approved for CLE credit!

Registration for professionals is $35.00, and $20.00 for students or alumni of Ave Marie School of Law. Thursday Report readers may also register for $100.00, and receive a bucket of Kentucky Fried Chicken, two pints of mashed potatoes, and an extra stick of butter in exchange for their donation and a testimonial, which must be provided before the program in case you do not like it.  To register, contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

********************************************

Cartoon 1

Cartoon 2

Upcoming Seminars and Webinars

Calendar of Events

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE PORT RICHEY PRESENTATION:

Alan Gassman will be speaking with Barry Flagg at the North Suncoast Chapter FICPA meeting on a topic to be determined.

Date: Wednesday, August 19, 2015 | 4:30 PM – 6:15 PM

Location: Chili’s | 9600 US 19 North, Port Richey, FL, 34668

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

I was fortunate to attend the Law Practice and Professional Development Workshop conducted by Alan Gassman, Esq. in Clearwater, Florida on August 3, 2014.  The Workshop covered a wide range of topics from Goal Setting and Gratitude to as practical a topic as law office logistics.  Alan’s approach was intimate, self-revelatory and highly instructive.  I have been practicing law for 20 years and have never attended a program as broad ranging, practical and encouraging.  The depth of Alan’s thought and experience is obvious in the materials and in the ease with which he led the discussions.  This was not a dull lecture but a highly engaging workshop that was over before you expected it to be.

Daniel Medina, B.C.S
Board Certified in Wills, Trusts and Estates
Medina Law Group, P.A.

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

**********************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on the topic of EVERYTHING YOU ALWAYS WANTED TO KNOW ABOUT CREDITOR PROTECTION AND DIDN’T EVEN THINK TO ASK.

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR (CONTACT US FOR A 25% DISCOUNT):

Alan Gassman and Al King, co-founder, co-chair, and co-CEO of South Dakota Trust Company, LLC, will present a Bloomberg BNA Webinar entitled WHAT IS SO SPECIAL ABOUT SOUTH DAKOTA? DOMESTIC ASSET PROTECTION TRUST LAW AND PRACTICES.

South Dakota’s legislature has attempted to take the best from each of the states that have the most favorable estate and trust laws to provide a fresh platform for examining and maximizing tax and non-asset protection objectives. This webinar will provide a practical and interesting discussion of both South Dakota and practical domestic asset protection law strategies. It will cover the legal aspects, present checklists and sample trust clauses, and provide creative and practical planning techniques that can be used by practitioners and their clients.

Date: Wednesday, September 9, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: To register for this webinar, please click here. For additional information, please email Alan Gassman at agassman@gassmanpa.com

**********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE SOUTH BEND PRESENTATION:

41ST ANNUAL NOTRE DAME TAX AND ESTATE PLANNING INSTITUTE

Rebecca Ryan, Bill Boersma, Daen Wombwell, Michael Halloran, and Alan Gassman will be presenting a talk at the Notre Dame Tax & Estate Planning Institute on the topic of UNDERSTANDING ILLUSTRATIONS, DESIGN OPPORTUNITIES, AND FINANCIAL EVALUATION OF WHOLE LIFE, UNIVERSAL, VARIABLE, AND EQUITY INDEXED LIFE INSURANCE.

Date: September 17 – 18, 2015 | Alan Gassman will speak on Thursday, September 17 | 11:30 AM – 12:30 AM

Location: Century Center | 120 South Saint Joseph Street, South Bend, IN 46601

Additional Information: Click here to download the 2015 program brochure. For more information, please contact Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

**********************************************************

LIVE WEBINAR:

Alan Gassman, Christopher Denicolo, and Kenneth Crotty will present a 50-minute webinar entitled CREATIVE PLANNING FOR FLORIDA REAL ESTATE. This presentation will be free and worth every dollar!

There will be two opportunities to attend this presentation. This webinar will qualify for CLE and CPE credit.

Date: Wednesday, September 23, 2015 | 12:30 PM or 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman will present a free, 30-minute webinar on the topic of THE 10 BIGGEST LEGAL MISTAKES MOST BUSINESS OWNERS AND INVESTORS MAKE (AND HOW YOU CAN AVOID MAKING THEM.)

There will be two opportunities to attend this presentation.

Date: Thursday, September 24, 2015 | 12:30 PM or 5:00 PM

Location: Online webinar.

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR (CONTACT US FOR A 25% DISCOUNT):

Alan Gassman and Lee-Ford Tritt will present a webinar on the topic of WHETHER TO MARRY AND WHAT TO CONSIDER: A TAX AND ESTATE PLANNER’S GUIDE TO COUNSELING SAME-SEX COUPLES WHO MAY TIE THE KNOT for Bloomberg BNA.

Following the decision of the United States Supreme Court in Obergefell v. Hodges, same-sex couples now enjoy the same legal and tax benefits as opposite-sex couples. These benefits include marriage, divorce, adoption and child custody, separation agreements, Qualified Domestic Relations Orders (QDROs), marital property, survivorship spousal death benefits, inheritance through intestacy, priority rights in guardianship proceedings, and contract rights.

This program will discuss relationship and marital agreements, tax issues, reasons to marry or not marry, and a number of unique circumstances that can apply to same-sex couples as well as to opposite-sex couples.

Date: Wednesday, September 30, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Steven B. Gorin and Alan Gassman will present a free webinar on the topic of INCOME TAX EXIT STRATEGIES. There will be two opportunities to attend this presentation.

Date: Thursday, October 1, 2015 | 12:30 PM and 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 PM webinar, please click here. To register for the 5:00 PM webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE CLEARWATER PRESENTATION:

Christopher Denicolo will be speaking at the Pinellas County Estate Planning Council meeting on the topic of PLANNING WITH IRAs AND QUALIFIED PLANS.

Date: Monday, October 5, 2015

Location: To Be Determined

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Christopher Denicolo at christopher@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Christopher Denicolo will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will have the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman will present a free, 30 minute webinar on the topic of ESTATE AND ESTATE TAX PLANNING – CONVENTIONAL AND ADVANCED PLANNING TECHNIQUES TO MINIMIZE TAXES AND EFFECTIVELY PASS ON YOUR WEALTH.

There will be two opportunities to attend this presentation.

Date: Wednesday, October 14, 2015 | 12:30 PM and 5:00 PM

Location: Online webinar.

Additional Information: To register for the 12:30 PM webinar, please click here. To register for the 5:00 PM webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

**********************************************************

LIVE MANHATTAN PRESENTATION:

INTERACTIVE ESTATE AND ELDER PLANNING LEGAL SUMMIT

Alan Gassman will be speaking on Scientific Marketing For The Estate Planner – How to do more of what you love to do, and less of the other, while better serving clients, colleagues, and your community.

Other speakers include Jonathan Blattmachr, Austin Bramwell, Natalie Choate, Mitchell Gans, and Gideon Rothschild.

Date: November 4 – 6, 2015 | Alan Gassman will be speaking on November 5 | Time TBA

Location: New York Hilton Midtown Manhattan | 1335 Avenue of the Americas, New York, NY 10019

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information or visit http://ilsummit.com/ to register.

Notable Events by Others

 LIVE TAMPA EVENT:

TAMPA THEATRE 14TH ANNUAL WINEFEST

Bust out your sweet dance moves and come have a “killer time” with Napoleon, Pedro, Kip, and Lafawnduh at Tampa Theatre’s 14th annual WineFest, Napoleon Wineamite. This year’s event features snacks and samples from local independent restaurants, sips from the finest wineries, and evening of rare, top-rated wines and – for the first time this year – a “Movie Under the Stars” screening of this year’s theme, Napoleon Dynamite.

While the theme may be silly, the purpose is most serious. Now in its 14th year, the annual WineFest is Tampa Theatre’s biggest fundraising event of the year, benefitting the historic movie palace’s artistic and educational programs, as well as its ongoing preservation and restoration.

Date: September 10 – 17, 2015

Location: Tampa Theatre | 711 N. Franklin Street, Tampa, FL 33602

Additional Information: Tickets are on sale now at www.tampatheatre.org/winefest. Sponsorship opportunities are also available. Please contact Maggie Ciadella at maggie@tampatheatre.org for more information about sponsorship or the event.

**********************************************************

LIVE ORLANDO PRESENTATION:

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING

 Date: January 11 – January 15, 2016

Come celebrate the 50th Year Anniversary (and 32 years of Alan Gassman not speaking at this conference) with us and our many friends (or at least they pretend to like us) at this important annual estate planning event.

Location: Orlando World Center Marriott Resort & Convention Center | 8701 World Center Drive, Orlando, FL 32821

Additional Information: Registration for the 50th Annual Heckerling Institute on Estate Planning will open on August 3, 2015. For more information, please visit http://www.law.miami.edu/heckerling/.

**********************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfers in the Context of Estate Planning, Howard Zaritsky will talk about Income and Estate Tax Planning Techniques in View of Recent Developments, and Lee-Ford Tritt will speak on Gun Trusts and Same Sex Marriage Consideration Highlights.  Do not miss this important conference.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

August Rates

The Thursday Report – 7.30.15 – TeleThursday Report

Posted on: July 30th, 2015

The Future of Telemedicine

How has the 4% Rule Held Up Since the Tech Bubble and the 2008 Financial Crisis? By Michael Kitces

Resident – Does Anyone Really Know What it Means? By David Thompson, CPCU, AAI, API, CRIS

Richard Connolly’s World – Estate Planning for Single or Childless Individuals

Thoughtful Corner – Office Efficiency and Logistics, Part II

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

The Future of Telemedicine

Nowadays, everyone uses the internet for scheduling appointments – hair appointments, nail appointments, even doctor appointments – but what if you could also attend your appointment with your physician over the internet? This is the future of medicine, and it is called “telemedicine.”

Defined in the Florida Administrative Code as the practice of medicine where patient care, treatment, and services are provided through the use of one site to another via electronic communication, telemedicine is changing the way that doctors and patients interact. The Statute was set to be codified as Florida Statute Section 456.4501 on July 1, 2015, but the legislature is still working out some kinks. However, the following is what is expected to occur under the new regulations.

The proposed Florida legislation defines telehealth services to include: patient assessment, diagnosis, consultation, treatment, and monitoring.[1] It will not include optical-related issues, nor will it allow for the doctor to prescribe controlled substances, such as narcotic pain medication. Still, not only does this technology save the patient a trip to the doctor’s office, the appointment overall is significantly shorter, allowing the doctor to see more patients.

In order for a doctor to practice telemedicine as part of his office routine, a valid doctor-patient relationship must be established prior to providing telemedicine services.[2] The typical background history interview must be performed and documented as with any regular doctor appointment. Doctors must also ensure that the patient’s insurance will cover telemedicine visits and also ensure that their own liability insurance covers telemedicine as well.[3]

A representative from eVisit, a telemedicine company, stated that “[a] telemedicine visit is well suited for minor medical conditions and, in most cases, the patient is well aware of what’s wrong – i.e. ‘I’ve had a sinus infection, UTI, cold/flu, etc. in the past and this is what’s worked, etc.'” The representative also regarded the technology as beneficial for surgeons, especially, due to the idea that telemedicine saves them time and reduces unnecessary readmissions. Further, the representative stated that:

Physicians are trained to ask a series of questions to rule out other possible ailments…For example, if you thought you had a sinus infection, the physician would most likely ask you if you were experiencing soreness anywhere else, ruling out something more serious, like meningitis.

In fact, the reason why a patient-doctor relationship must be established is so that the doctor is able to make an accurate diagnosis via the telemedicine pathway as opposed to an in-office visit. Without a valid relationship, the doctor would be unable to make a definitive diagnosis.

While this concept could potentially prove to be more beneficial to doctors and patients, there have also been some points of contention regarding the proposed legislation. For instance, one problematic issue has been compensation. Sam Miller, a spokesperson for the Florida Insurance Counsel stated that insurers simply do not want the state to require them to compensate doctors the same rates for telemedicine visits as they do for in-office exams.[4] In fact, in February of 2015, the Senator proposing the bill removed language that would have required Medicaid to pay equal rates of reimbursement.[5] Another hurdle is cross-state licensure. Only 12 states have licensing procedures that allow physicians to give care via telemedicine techniques, and doctors are required to be licensed in the state where the patient receiving the services resides.[6]

Telemedicine is not only a more efficient way to provide healthcare, it is also less expensive and opens the door for a larger job market. The global movement towards telemedicine will provide high-quality, low-cost medical services to rural areas, at-need families, home-bound seniors, and patients who cannot travel to see their doctor.[7] With that movement will come an increase in the job market relating to telemedicine.

Paula Guy, the CEO of non-profit Georgia Partnership for Telehealth, stated that Florida will be the next state that offers new opportunities for the telemedicine industry. She further stated:

Jobs will open up for IT professionals to set up and maintain the secure teleconference, data-stream links and software. People will be needed to train and certify workers, to develop academic curricula and teach certification courses to tech-shy physicians and to coordinate the “nurse presenters” who serve as the remote physicians’ eyes, ears, and arms in dealing with on-site patients.[8]

Telemedicine, ranging from a simple telephone call to complex video conferencing, will help increase the job market in Florida for a multitude of industries and provide beneficial health care to people who need it most. A three to five minute meeting a doctor through a telemedicine interface will improve patient care by increasing the amount of patients that a doctor can see per day. Further, it will allow the patient to be in a more relaxed, comfortable environment and save them a trip to the doctor’s office. With what seems like everything being streamlined through the internet, it will be no surprise when doctor’s visits through telemedicine platforms become more and more commonplace.

**********************************************
[1] See Fla. Stat. §456.4501
[2] Troy Kishbaugh and Julie Tyk, Telemedicine Update: AMA Guidelines and Florida State Law, Florida MD, July 2014.
[3] Id.
[4] Brian Heaton, Florida Lawmakers Debate Bill to Allow Virtual Medical Visits, South Florida Sun-Sentinel, March 16, 2015.
[5] Id.
[6] Id.
[7] Ron Hurtibise, Coming telemedicine boom to drive job opportunities in Florida, South Florida Sun-Sentinel, Feb. 21, 2015.
[8] Id.

How has the 4% Rule Held Up Since the Tech Bubble
and the 2008 Financial Crisis?

by Michael Kitces

Kitces

Michael E. Kitces, MSFS, MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL, is a nationally recognized speaker and sought-after commentator on financial planning issues. He also writes extensively on a broad range of advanced financial planning topics. He is the co-author of books such as The Advisor’s Guide to Annuities and Tools & Techniques of Retirement Income Planning. He is currently a Director of Planning Research and a Partner at Pinnacle Advisory Group, Inc.

The following article was originally published on the blog Nerd’s Eye View: Commentary on Financial Planning News and Developments by Michael E. Kitces on July 29, 2015. Excerpts from the article are re-produced below.

To see the complete article, please click here.

The 4% rule has been much maligned lately, as recent market woes of the past 15 years, from the tech crash of 2000 to the global financial crisis of 2008, have pressured both market returns and the portfolios of retirees.

Yet, a deeper look reveals that if a 2008 or even a 2000 retiree had been following the 4% rule since retirement, their portfolios would be no worse off than any of the other “terrible” historical market scenarios that created the 4% rule from retirement years like 1929, 1937, and 1966. To some extent, the portfolio of the modern retiree is buoyed by the (only) modest inflation that has been occurring in recent years, yet even after adjusting for inflation, today’s retirees are not doing any materially worse than other historical bad-market scenarios where the 4% rule worked.

Ultimately, this doesn’t necessarily mean that the coming years won’t turn out to be even worse or that the 4% rule is “sacred”, but it does emphasize just how bad the historical market returns were that created it and just how conservative the 4% rule actually is, and that recent market events like the financial crisis are not an example of the failings of the 4% rule but how robustly it succeeds!

How the 4% Rule is Faring for 2000 and 2008 Retirees

The fact that the 4% rule is based on a particular subset of especially bad historical scenarios gives us a unique opportunity to compare recent challenging times for retirees, like those who retired in 2000 or 2008, and see how they compare. In other words, if we looked at how the portfolio of a retiree was doing in the first half of a retirement starting in 1929, 1937, or 1966, would a retiree who started in 2000 or 2008 be doing similar, better, or worse?

Chart 1

As the results reveal in the chart above, despite how shocking the tech crash and the 2008 financial crisis appeared to be in real time, the reality is that such retirees still have portfolios that are performing similar to or better than most of the historical 4% rule scenarios. The 2000 retiree is already halfway through the 30-year time horizon with similar wealth to a 1929, 1937, or 1966 retiree at this point, and the 2008 retiree is even further ahead than any of those historical scenarios (and even ahead of the 2000 retiree, too!).

Of course, an important caveat to the chart above is that it’s based on “nominal” dollars, not adjusted for inflation, which is important, because it means that retirees who had similar portfolio balances after the first half of retirement were not necessarily going to have the same buying power with those dollars for the rest of retirement (because of what inflation had been in the first half of retirement). This is especially true for the 1966 retiree, who experienced significant double-digit inflation in the first half of retirement.

Accordingly, the chart below re-calculates the progress of these retirees, based not on the nominal value of their portfolio through the first half of retirement, but based on the amount of inflation-adjusted spending they were doing from the portfolio at that halfway point. In other words, what was the retiree’s then-current withdrawal rate, year by year, as both the portfolio bounced around and inflation-adjusted spending requirements continued to rise each year?

Chart 2

In this chart (where lower numbers are good because it means the withdrawal rate is low and spending is modest relative to wealth), it quickly becomes clear after adjusting for the level of inflation-adjusted spending how much more severely adverse the first half of retirement was for the 1966 retiree than the others (the 1966 line is much higher than the rest). Even though the value of the portfolio was similar to the other retirements when measured halfway through retirement, the current withdrawal rate at that point was far more problematic, having already spiked above 10% with 15 years still to go. In fact, the only reason the 1966 retiree was able to finish retirement at all with such a high withdrawal rate at the midpoint is that, by the half-way mark of retirement in 1981, both the stock and bond markets had gotten so cheap (yields had gotten so high) that the superior returns (and declining inflation) made it possible to finish successfully.

Relative to the 2000 or 2008 retiree, though, the results continue to look reasonably in line. Certainly the markets are not as favorably valued now for the 2000 retirees as they were in 1981 for the 1966 retiree, but then again, the 2000 retiree is still only at a 6.2% withdrawal rate today (with just 15 years to go,) while the 1966 retiree was over a 10% withdrawal rate at this point. And in the case of a 2008 retiree, the withdrawal rate is already right back at the 4% initial withdrawal rate the retiree began with (after already doing 6 years worth of retirement spending!).

Keeping Retiree Market Disasters in Historical Context

Ultimately, the key point here is simply to recognize that the 2000 retiree is merely “in line” with the 1929 retiree and doing better than the rest. And the 2008 retiree, even having started with the global financial crisis out of the gate, is already doing far better than any of these historical scenarios! In other words, while the tech crash and especially the global financial crisis were scary, they still haven’t been the kind of scenarios that spell outright doom for the 4% rule.

To read more about the 4% rule, including an analysis of how conservative a 4% safe withdrawal rate is, as well as a further discussion on how to keep retiree market disasters in historical context, please click here to read the article on Nerd’s Eye View.

Resident – Does Anyone Really Know What it Means?
By David Thompson, CPCU, AAI, API, CRIS

Thompson

David Thompson, CPCU, AAI, API, CRIS, works in a training and education position with the Florida Association of Insurance Agents in Tallahassee, Florida, where he presents continuing education seminars throughout the country on a variety of insurance subjects. He received his degree from Mercer University in Macon, Georgia, and served as a commissioned officer in the US Army and US Coast Guard. He can be reached at dthompson@faia.com.

The following article is copyrighted by the Florida Association of Insurance Agents
and is used with permission.

Almost every personal lines policy uses the word “resident” somewhere in the form. The problem is few (if any) policies define what the term “resident” actually means. For example, the term “family member” is defined in the personal auto policy as “…a person related to you by blood, marriage, or adoption who is a resident of your household.” Having status as a resident often is the key to having coverage under the policy.

Lacking a policy definition of “resident,” court cases provide valuable insight in interpreting the term. I recently spent the better part of a day on the Internet reading court cases dealing with residency. Since few people would find that as interesting as I did, I’ll mention a few of the cases that were of interest.

College Kids

In the Oregon case of Waller v. Auto-Owners Insurance Company, the 17-year-old daughter of an insured moved from Florida to Oregon to attend college. She rented an apartment in her name and her father’s name, represented she lived in Oregon for the purposes of getting an in-state tuition rate, opened a bank account in her name, obtained utilities in her name, and obtained an Oregon driver’s license. The daughter also maintained a bedroom in her parent’s home in another state and some of her possessions remained there. She had never expressed intent not to return to her parent’s home after college, being unsure of her plans after graduation. After being injured in an auto accident, she claimed residency with her parents, seeking $1,475,000 in underinsured motorist coverage from her parent’s policy. While the trail court sided with the insurance company in denying the claim, the appeals court ruled the trail court had erred in its decision, and the case was sent back to the trial court.

Dual Residency

In the Ohio case of Prudential v. Koby, a 32-year-old captain in the US Army was ruled to have held dual residency, at his home as well as that of his parents. The court stated, “…there was no requirement that, in order for a person to be a resident of the named insured’s household, such residence must be the sole or exclusive residence of the person.”

Divorced Parents

In the Florida case of Progressive v. Wesley, a child, Taylor Wesley, was killed in an automobile accident. At the time of the accident, her parents were divorced, and the father was awarded primary custody of the child, however, both parents shared parental responsibility. The child kept a room at the home of both parents. Arguments were presented on both sides showing how the child lived with one parent. The court said, “Either determination of Taylor’s residency would be reasonable. We must accept the interpretation which would favor the insured.” Coverage was afforded under the policies of both parents.

Kids Renting from Mom and Dad

In the Florida case of Philbin v. American States, Richard and Rosemary Curtis owned a house and leased it to their son, William, who was the sole resident of the house. Richard and Rosemary owned another home and lived in that home full time. A pit bull dog owned by William attacked plaintiff Philbin, who sued Richard and Rosemary as owners of the house, and William as owner of the dog. Richard claimed residency under his parent’s policy, but lacking any evidence that William resided with his parents, coverage for the $2.3 million verdict against William was denied.

What Constitutes “Residency”?

During the eleven years after moving out of his parents’ home following high school graduation, the defendant had worked and lived on his own, married, and played professional hockey. Divorced and unemployed, he moved back in with his parents at age 29, although he “spent a lot of time” at his new girlfriend’s house. The Supreme Court supported an appeals court citation of three circumstances found by the Wisconsin Supreme Court to determine residency in a household: (1) living under the same roof, (2) a close, intimate, and informal relationship, and (3) when the duration of residency is likely to be substantial such that it is reasonable to conclude that the parties would consider the relationship in procuring insurance and in their reliance on it to protect them. Since the Minnesota Supreme Court found no conflict between these standards and Minnesota law and upheld the son’s status as an “insured” under the contract. (State Farm Insurance Company v. Short, et al., Minnesota Supreme Court, 1990.)

What is a “Resident” & what is “in the care of”?

An Indiana resident permitted her nephew’s three children to move in with her while he looked for work and a home. In a lawsuit that arose, the federal district court ruled that the children were “insureds” within a reasonable interpretation of the term “resident” because they manifested more than a mere physical presence in the household, were completely dependent on the named insured for food, clothing, shelter, and supervisory care. (Allstate Insurance Company v. Shockley, 793 F.Supp. 852, S.D. Ind., 1991.)

Residents of Multiple Households

A divorced woman’s son spent most weekdays at his father’s house, but most weekends, some weekdays, and most summers with his mother. The son was in the legal custody of his father, spent most of his time in his father’s house, kept most of his possessions there, and was living there when the occurrence happened that gave rise to a lawsuit under his mother’s policy. The court ruled that there was nothing in the mother’s policy that prohibited him from being a resident of more than one household. (Mutual Service Casualty Insurance Company, Minnesota Court of Appeals, 1987.)

Dual Households

An insured was divorced from his wife and she was awarded sole custody of their son, although the insured had extensive visitations rights and maintained a space in his home for his son’s frequent visits. The son was killed while riding in his mother’s car and the father sought recovery under the UM/UIM provisions of his auto policy on the basis that his son was a “family member” under his policy. The court found coverage on the basis that the policy did not preclude an insured from being a resident of more than one household. (American Family Mutual Insurance Company v. Thiem, Minnesota Supreme Court 1993). The same logic was applied in a homeowner’s case in the same state.

Children in College

Courts have generally held that children away at college are still considered to be “family members”, i.e., household residents (e.g. Crump v. State Farm Mutual Automobile Insurance Company, Missouri Court of Appeals, 1992). However, in one case, the jury determined that a child away at college was not a resident of the household – this determination enabled the child’s sister to recover over $600,000 under their father’s policy (he was driving the son’s auto) for a UM claim that would have been excluded if her brother had been considered a “family member” under the father’s policy, so this may have been a reason for this particular decision (Huskey v. Crisp, Tennessee Supreme Court, 1993). In addition, policy exclusions may apply even though the child may be considered an insured otherwise.

“Independent” Children

In one case, the named insured’s son who maintained his own apartment filed a UM claim under his father’s policy, contending that he was still a resident because he stored personal belongings and spent the night there occasionally – the court found that he did not meet the definition of a “family member” (Aetna C&S Company v. Gutstein, New York Court of Appeals, 1992). In a similar case, the court reached the same conclusion (State Farm Mutual Automobile Insurance Company v. Taussig, Illinois Court of Appeals, 1992).

Divorced Parents

As reported by IRMI, the Ohio Court of Appeals ruled that a child was a “resident relative” of a noncustodial parent’s household. Keith v. State Farm Ins. Co., 2007 Ohio 1878 (Ohio App. 4/20/2007).

As the above court cases demonstrate, determining residency is a complex task involving numerous issues. Each situation is unique and there is no “cut and dry” method to determine residency status. While courts tend to view coverage in favor of resident status (even when it appears there is sufficient doubt as to the status) the safe course of action is to gather all the facts and present the situation to the company for a coverage interpretation prior to the claim. As always, document answers given by the company for future reference.

Thank you to David and the Florida Association of Insurance Agents for allowing us to bring this article to Thursday Report readers! For more great articles, check out the FAIA’s Education Library at https://www.faia.com/Resources.aspx?pid=198.

Richard Connolly’s World
Estate Planning for Single or Childless Individuals

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with links to the articles.

This week, the first article of interest is “Estate Planning Essentials for Single People: It Can Be More Complex than for Married Couples” by Carolyn T. Geer. This article was featured in The Wall Street Journal on December 7, 2014.

Richard’s description is as follows:

In 1970, slightly more than a third of Americans age 15 and older were single, according to the US Census. By 2013, their numbers approached 50% of Americans.

Among US citizens aged 65 and older, more than half (53%) of women and more than one quarter (26%) of men were unmarried last year. That amounts to 18 million divorced, never-married, or widowed seniors.

It’s important to create, at minimum, a will and/or revocable living trust stating specifically how you want your assets to be distributed after you die and naming an executor and/or trustee to carry out your wishes.

Please click here to read this article in its entirety.

The second article of interest this week is entitled “Estate Planning for Childless Couples” also by Carolyn T. Geer. This article was featured in The Wall Street Journal on November 8, 2014.

Richard’s description is as follows:

A basic estate plan for a couple with children is pretty simple, but readers might be wondering, “What about marrieds without kids?”

A reader in California asked, “My husband and I own our house, are retired, with a high six-figure nest egg, and no will or trust. What is the minimum we need to do?”

You have two main tasks. One is to decide what will happen to your property after you die. The other, arguably more important – and trickier – task is to specify who will handle your medical and financial affairs if you’re incapacitated.

If you don’t want to risk disinheriting your relatives, or if you’d like to leave something to friends or charity, you need a plan.

Please click here to read this article in its entirety.

Thoughtful Corner
Office Efficiency and Logistics, Part II
by Alan Gassman

Ideas and Time Savers

The following is a list of ideas that may help you save some time during your daily office tasks:

  • Return all emails immediately. Then, they will not pile up, and you will not forget to reply to something important.
  • Use multiple computer screens for multiple purposes.
  • Print any email that needs a follow-up.
  • Use different colored paper for different printers and/or different types of documents.
  • Integrate reviewing draft bills into your weekly routine.
  • Give the client a book that will answer many of the questions they may have.
  • Use summary charts for key information and to facilitate client understanding. If you can chart it, do it. Once you own the chart, you own the client or the transaction.

Writing in the Margins

When in a client meeting or on a conference call, something said or discussed during the call or meeting may spark a remembrance of something you need to do with another client. Make note of this in the margin of your notepad in a way that, should the client you’re currently with read the notepad, they would not specifically know what other client or situation is involved.

If you have an assistant copy your notes after a meeting, they will notice that something is written in the margins. Request that they make extra copies of the pages that contain margin writing and follow-up with you as to what is needed or desired.

Those items can then be added to an action list or responded to appropriately.

“Ask Me Tomorrow”

Quite often, a team member will ask me a question, and my answer will be, “ask me again tomorrow.”

I will then write the question or matter down to activate my subconscious mind and allow it to begin thinking through what the final decision will be or should be.

The next day, or sometimes the day after, I will have an answer. It may come to me subconsciously or while thinking “offline.”

Given the choice between making sure that no one has sent you anything on Facebook in the last half hour or picturing yourself in the neatest place you’ve ever been or want to be with whomever you would prefer to have there with you, which do you choose?

Great ideas typically happen when you are “offline” from work but not normally while you are still plugged in to social media activities. Identify this time waster and set it aside so that you might have an answer for your team member the following day.

Your Smart Phone is Not All that Smart

It’s great to be able to get messages and reply to them on the go or anywhere in which you have a signal, but the great majority of professionals make a grave mistake by routinely answering questions and addressing opportunities with one finger, one letter at a time, without circling back to expound, connect, or follow-up. Here is why this is a grave mistake:

When you type, dictate a response for transcription, or call someone, you have a much easier flow of information, detail, creativity, and warmth to convey. When you reply by phone, you are much less likely to follow-up or really think through what the other person wants or needs.

The recipient is also not going to give much credence or thought to a hastily typed message that comes with the suffix “sent from my phone; please excuse typos and grammar errors.”

When I am away from the office and answering emails on my phone, I copy key people in my organization as a signal for them to follow up with me on the matter. I have my assistant print emails I sent on my phone whenever I am away for a long period of time. These print-outs help me ensure needed follow-ups are completed and any significant time spent reviewing messages or documents on my phone is billed for.

I am also mindful that responses and interactions composed via a phone will not be as rich, warm, or meaningful than they would be if I had a keyboard or a Dictaphone in front of me and act accordingly.

So many people just “fling” documents around and send scattered emails with no continuity as it is. Do not join that club. It will cheapen your image and weaken your response to important messages that deserve to be well answered. “I’ll get back to you” is an acceptable response and possibly the best response you can use in many cases.

Do not become a scattered mess like so many of our colleagues. The phone is to be our servant, not our master or our downfall.

The above has been excerpted from the Professional Acceleration Workshop Workbook, which can be purchased by clicking here.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

***************************************************

Hedghog

Upcoming Seminars and Webinars

Calendar of Events

LIVE BLOOMBERG BNA WEBINAR:

Jonathan Blattmachr, Lee-Ford Tritt, Sean Healy, and Alan Gassman will present a Bloomberg BNA webinar entitled HAVE GUN TRUST – WILL TRAVEL: HOW TO DESIGN, DRAFT, AND IMPLEMENT GUN TRUSTS.

This webinar will examine pertinent aspects of the National Firearms Act (NFA), explain how to stay compliant with the NFA, and elaborate on how to develop fully-compliant gun trusts. This program can qualify for up to 1.0 CPE credits.

Date: Wednesday, August 5, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: To register for this webinar, please click here. For more information, please contact Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman, Edwin P. Morrow, III, and Christopher Denicolo will present a Bloomberg BNA webinar entitled ESTATE AND TRUST PLANNING WITH IRA AND QUALIFIED PLAN BENEFITS.

This webinar will provide participants with clear guidelines for understanding and applying the rules with reference to minimum distributions, transfers and rollovers, trust beneficiaries, and how to otherwise handle and plan for pension and IRA accounts. Participants will receive a handbook with over 200 pages of concise yet thorough explanations, colored charts and guides, Excel spreadsheets that can be used to illustrate account growth and taxes inside and outside accounts using distribution rule scenarios and more.

Date: Thursday, August 6, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: To register for this webinar, please click here. For more information, please contact Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE PORT RICHEY PRESENTATION:

Alan Gassman will be speaking with Barry Flagg at the North Suncoast Chapter FICPA meeting on a topic to be determined.

Date: Wednesday, August 19, 2015 | 4:30 PM – 6:15 PM

Location: Chili’s | 9600 US 19 North, Port Richey, FL, 34668

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER 

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

I was fortunate to attend the Law Practice and Professional Development Workshop conducted by Alan Gassman, Esq. in Clearwater, Florida on August 3, 2014.  The Workshop covered a wide range of topics from Goal Setting and Gratitude to as practical a topic as law office logistics.  Alan’s approach was intimate, self-revelatory and highly instructive.  I have been practicing law for 20 years and have never attended a program as broad ranging, practical and encouraging.  The depth of Alan’s thought and experience is obvious in the materials and in the ease with which he led the discussions.  This was not a dull lecture but a highly engaging workshop that was over before you expected it to be.

Daniel Medina, B.C.S
Board Certified in Wills, Trusts and Estates
Medina Law Group, P.A.

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

**********************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on the topic of EVERYTHING YOU ALWAYS WANTED TO KNOW ABOUT CREDITOR PROTECTION AND DIDN’T EVEN THINK TO ASK.

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and Al King, co-founder, co-chair, and co-CEO of South Dakota Trust Company, LLC, will present a Bloomberg BNA Webinar entitled WHAT IS SO SPECIAL ABOUT SOUTH DAKOTA? DOMESTIC ASSET PROTECTION TRUST LAW AND PRACTICES.

South Dakota’s legislature has attempted to take the best from each of the states that have the most favorable estate and trust laws to provide a fresh platform for examining and maximizing tax and non-asset protection objectives. This webinar will provide a practical and interesting discussion of both South Dakota and practical domestic asset protection law strategies. It will cover the legal aspects, present checklists and sample trust clauses, and provide creative and practical planning techniques that can be used by practitioners and their clients.

Date: Wednesday, September 9, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: To register for this webinar, please click here. For additional information, please email Alan Gassman at agassman@gassmanpa.com

**********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE SOUTH BEND PRESENTATION:

41ST ANNUAL NOTRE DAME TAX AND ESTATE PLANNING INSTITUTE

Rebecca Ryan, Bill Boersma, Daen Wombwell, Michael Halloran, and Alan Gassman will be presenting a talk at the Notre Dame Tax & Estate Planning Institute on the topic of UNDERSTANDING ILLUSTRATIONS, DESIGN OPPORTUNITIES, AND FINANCIAL EVALUATION OF WHOLE LIFE, UNIVERSAL, VARIABLE, AND EQUITY INDEXED LIFE INSURANCE.

Date: September 17 – 18, 2015 | Alan Gassman will speak on Thursday, September 17 | 11:30 AM – 12:30 AM

Location: Century Center | 120 South Saint Joseph Street, South Bend, IN 46601

Additional Information: Click here to download the 2015 program brochure. For more information, please contact Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

**********************************************************

LIVE WEBINAR:

Alan Gassman, Christopher Denicolo, and Kenneth Crotty will present a 50-minute webinar entitled CREATIVE PLANNING FOR FLORIDA REAL ESTATE. This presentation will be free and worth every dollar!

There will be two opportunities to attend this presentation. This webinar will qualify for CLE and CPE credit.

Date: Wednesday, September 23, 2015 | 12:30 PM or 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and Lee-Ford Tritt will present a webinar on the topic of WHETHER TO MARRY AND WHAT TO CONSIDER: A TAX AND ESTATE PLANNER’S GUIDE TO COUNSELING SAME-SEX COUPLES WHO MAY TIE THE KNOT for Bloomberg BNA.

Following the decision of the United States Supreme Court in Obergefell v. Hodges, same-sex couples now enjoy the same legal and tax benefits as opposite-sex couples. These benefits include marriage, divorce, adoption and child custody, separation agreements, Qualified Domestic Relations Orders (QDROs), marital property, survivorship spousal death benefits, inheritance through intestacy, priority rights in guardianship proceedings, and contract rights.

This program will discuss relationship and marital agreements, tax issues, reasons to marry or not marry, and a number of unique circumstances that can apply to same-sex couples as well as to opposite-sex couples.

Date: Wednesday, September 30, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Steven B. Gorin and Alan Gassman will present a free webinar on the topic of INCOME TAX EXIT STRATEGIES. There will be two opportunities to attend this presentation.

Date: Thursday, October 1, 2015 | 12:30 PM and 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 PM webinar, please click here. To register for the 5:00 PM webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE PINELLAS COUNTY PRESENTATION:

Christopher Denicolo will be speaking at the Pinellas County Estate Planning Council meeting on the topic of PLANNING WITH IRAs AND QUALIFIED PLANS.

Date: Monday, October 5, 2015

Location: To Be Determined

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Christopher Denicolo at christopher@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Christopher Denicolo will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

**********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

**********************************************************

LIVE MANHATTAN PRESENTATION:

INTERACTIVE ESTATE AND ELDER PLANNING LEGAL SUMMIT

Alan Gassman will be speaking on a topic to be determined at the InterActive Estate and Elder Planning Legal Summit.

Date: November 4 – 6, 2015 | Alan Gassman will be speaking on November 5 | Time TBA

Location: New York Hilton Midtown Manhattan | 1335 Avenue of the Americas, New York, NY 10019

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information or visit http://ilsummit.com/ to register.

Notable Events by Others 

LIVE TAMPA EVENT:

TAMPA THEATRE 14TH ANNUAL WINEFEST

Bust out your sweet dance moves and come have a “killer time” with Napoleon, Pedro, Kip, and Lafawnduh at Tampa Theatre’s 14th annual WineFest, Napoleon Wineamite. This year’s event features snacks and samples from local independent restaurants, sips from the finest wineries, and evening of rare, top-rated wines and – for the first time this year – a “Movie Under the Stars” screening of this year’s theme, Napoleon Dynamite.

While the theme may be silly, the purpose is most serious. Now in its 14th year, the annual WineFest is Tampa Theatre’s biggest fundraising event of the year, benefitting the historic movie palace’s artistic and educational programs, as well as its ongoing preservation and restoration.

Date: September 10 – 17, 2015

Location: Tampa Theatre | 711 N. Franklin Street, Tampa, FL 33602

Additional Information: Tickets are on sale now at www.tampatheatre.org/winefest. Sponsorship opportunities are also available. Please contact Maggie Ciadella at maggie@tampatheatre.org for more information about sponsorship or the event.

**********************************************************

LIVE ORLANDO PRESENTATION: 

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING 

Date: January 11 – January 15, 2016 

Location: Orlando World Center Marriott Resort & Convention Center | 8701 World Center Drive, Orlando, FL 32821 

Additional Information: Registration for the 50th Annual Heckerling Institute on Estate Planning will open on August 3, 2015. For more information, please visit http://www.law.miami.edu/heckerling/.

**********************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

June Rates

The Thursday Report – 7.23.15 – The Whiter Shade of Thursday

Posted on: July 23rd, 2015

The Whiter Shade of Thursday

Closing Letter Update

Florida CFPs Sue the CFP® Board and Lose in an Attempt to Circumvent or Avoid Ethical Violation Actions

Systems Thinking in Health Care and Cultural Shift by Pariksith Singh, M.D.

Life Insurance Definitions, Part III

Richard Connolly’s World – What to Do with IRA Funds

Thoughtful Corner – Office Efficiency and Logistics, Part I

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

The Whiter Shade of Thursday

“A Whiter Shade of Pale” was the debut single released on May 12, 1967 by the English rock band Procol Harum, pictured above. The band was nominated for induction into the Rock and Roll Hall of Fame in October of 2012.

The single “A Whiter Shade of Pale” was written by Gary Brooker, Keith Reid, and Matthew Fisher. The song reached number one on the UK Singles Chart and stayed there for six weeks. It reached number 5 on the equivalent US charts and is considered to be one of the counterculture anthems of the 1967 Summer of Love. As of 2009, it was the most-played song in public places in the United Kingdom. This song is one of fewer than 30 singles in music history to have sold over 10 million copies. You can hear the song by clicking here.

Closing Letter Update

Last week, we reported on a policy change at the IRS, which now requires attorneys to request a closing letter for an estate. You can see this report, as well as an article by Chuck Rubin about the policy change, by clicking here. In response, we received the following email from Thompson Coburn attorney and tax law giant Steven Gorin.

Steven said:

Regarding closing letters, you might add this to your next report:

See the first two Q&A of http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Estate-Taxes for details about the closing letter situation. [These questions have been reproduced below.]

This is an IRS attempt to save money due to budget cuts.

At a meeting I attended after this policy was announced, a Treasury representative asked [that we] not call the number listed on that web page to get the status or the closing letter. Instead, file Form 4056-T to provide an account transcript that tells us the status. That was a request (more in the nature of a plea), not a directive.

Note that a closing letter cuts short the period for the Code §645 election to be treated as an estate. Therefore, in some circumstances, not getting the closing letter might be good.

As an aside, in addition to obtaining a closing letter, consider filing Forms 5495 for estate tax returns and 4810 for the decedent’s gift and income tax returns.

Thanks, Steve, for this contribution! The first two questions and answers from the IRS website recommended by Steve are as follows:

When can I expect the Estate Tax Closing Letter?

For all estate tax returns filed on or after June 1, 2015, estate tax closing letters will be issued only upon request by the taxpayer. Please wait at least four months after filing the return to make the closing letter request to allow time for processing. For questions about estate tax closing letter requests, call 1-866-699-4083.

What if my estate tax return was filed before June 1, 2015?

There can be some variation, but for returns that are accepted as filed and contain no other errors or special circumstances, you should expect to receive your closing letter about 4 to 6 months after the return is filed. Returns that are selected for examination or reviewed for statistical purposes will take longer.

For Estate Tax Returns Filed After January 1, 2015 and Before June 1, 2015

IRS Chart

Florida CFPs Sue the CFP® Board and Lose in an Attempt to Circumvent or Avoid Ethical Violation Actions
by Alyssa Eberle, J.D. and Alan Gassman

Jeff and Kim Camarda, two Florida-based insurance advisors, filed a lawsuit against the CFP® Board in June of 2013. Prior to the lawsuit, the CFP® Board had completed an ethical investigation into the Camarda’s firm, Camarda Wealth Advisory. The Board had determined that the Camardas were in violation of the compensation disclosure rules by reason of having allegedly mislead consumers by using the “fee-only” characterization of their services, when, in fact, they also provided commissions-based business as well.[1] The disgruntled CFP® advisors sought to prevent the Board from publishing their public reprimand, claiming that they did not receive a fair hearing prior to the Board’s sanctioning.

The Certified Financial Planner Board of Standards, Inc. (CFP® Board) is the non-profit certifying and standard-setting organization that administers the Certified Financial Planner program and oversees the professionals using the CFP® certification in the United States. The CFP® certification requires additional education prerequisites, a six-hour examination, full-time experience, and an agreement to abide by the CFP® Board’s Standards of Professional Conduct.[2] The Standards of Professional Conduct include a Code of Ethics and Professional Responsibility. These rules must continue to be followed throughout a CFP®’s career and are essential to the designation.

When the Camardas decided to bring suit against the Board, it had recently been criticized for its failure to enforce rules fairly and consistently. In fact, in another recent case, Nigel Taylor, a CFP® certificant, had a complaint filed against him regarding his RIA firm. The complaint alleged that not only was his RIA firm “fee-only,” but also that Taylor owns a commission-based insurance agency.[3] Taylor disputed the claim, insisting that while he is personally a fee-and-commission-based CFP® advisor, his RIA firm did not receive any commission, and to state otherwise would be a “material misstatement.”[4]

Further, Taylor argued that the CFP® Board had no jurisdiction over his firm, only the CFP® certificants themselves. This issue aggravated Taylor to the point that he ended up dropping his CFP® certification marks. Upon Taylor’s decision to drop his CFP® certification, the Board halted their investigation into the matter.[5] The Board’s decision came as a surprise to the financial advisor community, therefore causing some to point out that ending the investigation without even rendering a decision “suggests the CFP® Board lacks confidence in its own rules and enforcement process.”[6]

The Camardas were apparently hoping to ride on the coat-tails of the arguments Taylor had initiated against the CFP® Board. The Camardas argued that the crux of the case against the Camardas relied on the idea that their fee-only firm and insurance agency together made them “functionally one entity,” such that their compensation model should have been disclosed as commission and fee. Yet the CFP® Board still has never publicly disclosed the “functionally one entity” precedent as a rule that all CFP® certificants must follow. While the Board insists that the notion has always been regarded, the precedent in the Camarda case hinged on a term that is not included in the Board’s terminology and has never been defined or explained.[7]

The case therefore centered around whether the CFP® Board is in breach of the contract with its certificants (the Camardas) by failing to establish clear cut rules to follow and/or failing to enforce those rules in a manner that would give the certificants proper due process. If the CFP® Board were to be found liable, the Board would not only face steep damage payments but also the risk of legal stigma for breaching its contract with CFP certificants by failing to establish clear rules that are enforced consistently. However, if the Board were to prevail against the Camardas, it would be legal validation of the organization’s ability to set its own practice standards and enforcement processes.[8]

Financial advisor, author, and lecturer Michael Kitces notes in his blog post entitled “Should CFP® Board Settle Camarda Case? My Argument and the Board’s Response,” that the Board had already racked up more than $1 million in legal fees as of 2014.[9] Would it really be worth it to try to win the case against the Camardas, especially if, at a minimum, the Board could be assessed the Camardas’ legal fees and business damages? Additionally, if the CFP® Board were to lose the case, the door is open for virtually every other CFP® certificant to question the organization that could lead to additional lawsuits and become a material threat to the Board’s financial stability. The Board could risk losing their standing as an ethical rule-making body for the profession, which would allow for alternative or state-based licensing arrangements to arise instead, rendering the Board obsolete.

In the end, it seems that the CFP® Board was saved the embarrassment of a public trial. Instead, the case was dismissed in favor of the Board, allowing them to accelerate the process of updating the rules and moving past the issue. Indeed, Ray Ferrara, CFP®, the Chair of the CFP®’s Board of Directors, stated that:

The lawsuit fundamentally threatens the CFP® Board’s mission to benefit the public by challenging our ability to enforce these standards…The very integrity of the CFP® certification would be undermined if the CFP® Board backed down from enforcing a disciplinary decision that was imposted in accordance with its rules and procedures.[10]

In a July 6 order, US District Judge Richard J. Leon granted a motion for summary judgment in favor of the Board, and the case of Camarda v. CFP Board was dismissed. As the parties come to an agreement as to what information is redacted, the financial advisory community waits to see what is inside the Judge’s complete Order. This case is a terrific example of the CFP® ethics review and disciplinary processes that are similar to other professions such as accountants, doctors, and lawyers.

************************************************
[1] Diana Britton and Megan Leonhardt, Camardas May Appeal Judge’s Decision in CFP Board Suit, Jul. 8, 2015, WealthManagement.com, accessed July 14, 2015
[2] See “Certified Financial Planner Board of Standards Inc. – CFP® Certification Examination.” Cfp.net
[3] Michael Kitces, Should CFP Board Settle Camarda Case?, Think Advisor, December 30, 2014. Accessed on July 13, 2015.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.

Systems Thinking in Health Care and Cultural Shift
by Pariksith Singh, M.D.

Dr. Singh

Pariksith Singh, M.D. is a true visionary in every sense of the word. Dr. Singh is a board-certified internal medicine physician who received his medical education at Sawai Man Singh Medical College in Rajasthan, India (where he was awarded honors in internal medicine and physiology).  His residency training occurred at All India Institute of Medical Services (New Delhi, India) and Mount Sinai Elmhurst Services, (Elmhurst, New York).  Upon completion of his residency, Dr. Singh relocated to Florida and worked for several years before establishing Access Health Care, LLC in 2001.

Any attempt to change health care and the culture of providers, patients, or employees involved in health care must operate under a “Systems Thinking” approach: an appreciation that one is dealing with complex human social, financial, and cultural interactions. Any pressure at one point may cause unintended consequences at another. The system must compensate for an individual’s efforts to transform it in such a manner that it will not counteract and produce an entirely opposite effect of the original action.

Cures to any health care issues are seldom clear-cut, and any attempt to fix things in a simple manner often turns out to be simplistic. A deep understanding of the interactions must be involved; especially when dealing with Population Medicine or at a network level.

For example, imagine an instance where seasoned managed care providers are sent to a busy office to help improve utilization and quality. When unnecessary referrals were curtailed, the specialists became upset and threatened. The specialists then rallied patients against the primary care provider, filed complaints at the HMO plan level, used abusive language and threatened lawsuits. While this happened, the patients – who were aggrieved at what they saw as denial of care and fall in quality and choice – started calling the Center for Medicare & Medicaid Services with complaints and leaving the primary care physician in droves. At the same time, the staff at the primary physician’s office rebelled at his high-handedness and review of inappropriate referrals as unreasonable and against the culture of that office. Thus, an excellent provider ended up achieving the exact opposite of what he had intended when he attempted to change the culture of health care in that county.

In retrospect, the provider should have spent more time developing a deeper engagement with the patients, explaining to them the approach to excellent health care. Doing so would have allayed their fears and concerns while, at the same time, allowing the provider to spend more time with the patients, building relationships.

A “Systems Approach” is holistic and not random or arbitrary. It looks at the complex network of relationships, positions, and interests of various specialists, vendors, and patients. It also creates a shared vison and, thus, provides for team learning. The provider becomes a partner in the patients’ care, open to their suggestions while sharing his expertise and knowledge, and has conversations and discussions that are open-ended. He is no longer seen as a threat to the patients’ well-being. On the contrary, a bond of trust is developed between the provider and the patient.

Also, the provider should have had a dialogue with the specialists to review concerns about the quality of care, keeping the patients’ idea of quality of care at the center of the discussion and focusing on a decision process that is evidence-based, objective, and mutually shared. As soon as subjectivity is removed and lines of communication created, there is a shift in perspective among the specialists. To be sure, the specialists have an interest in continuing the status quo since they are primarily paid on a fee-for-service basis. This can be achieved by creating win-win situations where primary develops long-term relationships with the specialist and brings in the leverage of volume or better engagement with patients.

At the same time, the primary should communicate with his office staff, ensuring the staff understands the reason for the change and how it will improve quality and outcomes. Once the nature of communication has changed, any new change is not a surprise and will be understood, if not always welcome.

We see a similar situation if a provider is asked to be a Physician Adviser (PA) at a hospital. While administration expects the PA to improve length of stay, reduce the number of queries or unsigned Medicare forms, it does not want to prevent the attending physicians from admitting patients to the facility. If the PA contacts the attending physicians about the need to complete their records, and the attending is upset and complains to the administration, the usual response is for administration to back down, leaving the PA confused and upset. Thus, no fundamental shift in culture at the hospital is affected, and only superficial changes are accomplished.

A systemic change would entail administration and the PA working as a team, creating clear expectations among admitting providers, sharing report cards and performance data transparently with all hospital staff and creating objective means to evaluate the standard of care being practiced in the hospital. Such an approach would involve intense and constant dialogue among physicians and administration along with the PA, and creating a common platform with a goal to improve outcomes and patient care in the facility that is immediately measurable and achievable.

A “Systems Approach” takes away the blame-game, since we are neither for nor against the system. We are an integral part of the system. Once we realize that, the rest becomes easy. The sight turns inwards and personal mastery and responsibility becomes critical. With such a sensibility, a true leverage can be found which truly causes a change in the system that may be healthier, more wholesome, and healing to all the participants in the web of healthcare.

Life Insurance Definitions, Part III

This is a continuation of our series on life insurance fluency and is derived from the materials that we are preparing for the September 17th and 18th Notre Dame Tax Institute (please don’t miss this! Click here for more information.)

How many of the following definitions do you know?

Life Insurance Definitions 1

Life Insurance Definitions 2

We thank Barry Flagg of Veralytic for his co-authorship of our life insurance materials and Alyssa Eberle, J.D. for her contribution to the life insurance materials as well. Please stay tuned for further important information.

Richard Connolly’s World
What to Do with IRA Funds

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with links to the articles.

This week, the first article of interest is “Using Your IRA Funds to Start a Business is Very Risky” by Peter J. Reilly. This article was featured on Forbes.com on June 16, 2015.

Richard’s description is as follows:

Mr. Ellis was an attorney who also wanted to get involved in the sale of used cars. He formed CST, LLC. CST had two members – Richard Brown, who worked for the LLC and contributed $20 for his 2% interest, and Mr. Ellis’s self-directed IRA, which contributed $319,500 for its 98% interest. The contribution to the LLC used up almost all of the IRA’s funds, which had been rolled over from a 401(k).

Mr. Ellis acted as the general manager of CST and drew a salary of $9,754 in 2005 and $29,263 in 2006. The two salary payments were properly reported on his return. That seems pretty innocent. Only it’s not.

On March 28, 2011, the Commissioner of the Internal Revenue Service sent the Ellises a notice of deficiency, identifying a $135,936 income-tax deficiency for 2005 or, in the alternative, a $133,067 deficiency for 2006. The notice also imposed a $27,187 accuracy-related penalty for 2005 or, in the alternative, a $26,613 accuracy-related penalty and $19,731 late-filing penalty for 2006. The Commissioner determined, in relevant part, that Mr. Ellis engaged in prohibited transactions under 26 U.S.C. § 4975(c) by (1) directing his IRA to acquire a membership interest in CST with the expectation that the company would employ him, and (2) receiving wages from CST. The notice explained that, as a result of these transactions, the IRA lost its status as an individual retirement account and its entire fair market value was treated as taxable income. See 26 U.S.C. § 408(e)(2).

It seems like an awfully harsh result, but the Circuit backed the Tax Court, which had backed the IRS.

The Tax Court found there was no prohibited transaction on the formation and original investment in the LLC by the IRA, but taking wages was a prohibited transaction. The 8th Circuit agreed (Ellis v. Comm’r of Internal Revenue, No. 14-1310 (8th Cir. 2015.)).

Please click here to read this article in its entirety.

The second article of interest this week is entitled “The Charitable IRA Stretch for Kids, Siblings, and Parents” by Ashlea Ebeling. This article was featured on Forbes.com on June 17, 2015.

Richard’s description is as follows:

You’re widowed and have a one million dollar individual retirement account. Do you leave it to charity or your kids?

Maybe both.

The once obscure technique of leaving an IRA to a charitable remainder unitrust (CRUT) is getting new buzz, what with some politicians (most notably, President Obama) wanting to limit IRAs left directly to non-spousal heirs to a five-year life. “If you don’t trust Congress, this is a great answer to get you nearly all the benefits of the stretch locked in at a nominal cost for a good cause,” says Michael Jones, an estate planner in Monterey, California and author of Inheriting an IRA.

Please click here to read this article in its entirety.

Thoughtful Corner
Office Efficiency and Logistics, Part I

Handing a Note to Someone in a Meeting or on the Phone

Oftentimes, there is a question as to whether or not to interrupt someone in a meeting or someone who is on the phone. If it is necessary to interrupt, consider the possibility of writing a fairly thorough note and handing it to the person during the meeting.

This way, the other people in the meeting can continue talking and do not have to hear a conversation that a secretary or other team member might need to have with a lawyer about confidential matters.

Type up a quick note, print it out, and hand the note to the person in the meeting. Then, stand next to him or her and wait for his or her response. Possible responses might be, “we can handle this later,” or “let me take a quick break from the meeting and handle this.”

The person in the meeting may also provide instructions at the bottom of the note, such as:

  • Schedule a call with this person for later today.
  • Have another person in the office speak to the person needing urgent assistance and/or handle the matter appropriately.
  • Take a message, and the matter will be dealt with when the meeting is over.

Identify Time Wasters

Examples of time wasters include:

  • Clients that don’t pay their bills.
  • Time wasted because of disorganization.
  • Distractions.
  • Time wasted because of others in the organization.
  • Idle chatter.
  • Going to lunch when there is no solid business or financial result.
  • Time spent with people trying to sell you things.

Working in Absolute Solitude

How effective is your concentration and relaxation with challenging projects or routine work when you know that you may be interrupted at any time? Distractions come in many forms, such as being surrounded by distractions like computers that may carry new emails that you would like to see, people walking by and talking, and cell phone sounds that tell you that you have new messages and calls waiting.

Most successful lawyers have an appointed quiet time and a quiet place where they can be free of these interruptive intrusions in order to do appropriate work.

How will you find your oasis to enable you to do this?

Consider the following ideas:

  • Use a room other than your normal office that has no computer, no phone, and proper surface and lighting to do what you need to do without interruption. Use it often.
  • Make an appointment to cause this experience to happen multiple times during your day and week, and let the people who would normally interrupt you know how to tell when you are in this mode and what you expect them to do and not to do at that time.
  • Check into a hotel room for the day so that you will not be interrupted.
  • Identify your time wasters and stop them.
  • If interruptions waste your time, go to a separate room with the work that needs concentrated efforts, close your door, unplug your phone, or turn off your cell phone.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

**********************************************

Irish Bar 1

Irish Bar 2

Upcoming Seminars and Webinars

Calendar of Events

LIVE ORLANDO PRESENTATION:

ORLANDO BUSINESS AND PROFESSIONAL PRACTICE OWNER SYMPOSIUM

Alan S. Gassman, business coach and author David Finkel, and others will present a two-day conference for high-net-worth business and professional practice owners sponsored by Maui Mastermind®.

Alan’s topics will include BASIC AND ADVANCED PLANNING TECHNIQUES FOR THE PROTECTION OF WEALTH, THE 10 BIGGEST MISTAKES THAT BUSINESS OWNERS AND PROFESSIONALS MAKE, and ESTATE TAX AVOIDANCE TECHNIQUES FOR BUSINESS OWNERS AND PROFESSIONALS.

Other topics include A Proven Map to Grow Your Business and Get Your Life Back, Building Wealth Outside of Your Company, Tax Reduction Strategies, and Understanding How Investments Work and What They Cost.

Date: July 30th and 31st, 2015

Location: Hyatt Regency Orlando | 9801 International Drive, Orlando, FL 32819

Additional Information: Interested individuals can contact agassman@gassmanpa.com or David Finkel at david@mauimastermind.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER 

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

I was fortunate to attend the Law Practice and Professional Development Workshop conducted by Alan Gassman, Esq. in Clearwater, Florida on August 3, 2014.  The Workshop covered a wide range of topics from Goal Setting and Gratitude to as practical a topic as law office logistics.  Alan’s approach was intimate, self-revelatory and highly instructive.  I have been practicing law for 20 years and have never attended a program as broad ranging, practical and encouraging.  The depth of Alan’s thought and experience is obvious in the materials and in the ease with which he led the discussions.  This was not a dull lecture but a highly engaging workshop that was over before you expected it to be.

Daniel Medina, B.C.S
Board Certified in Wills, Trusts and Estates
Medina Law Group, P.A.

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

**********************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on the topic of EVERYTHING YOU ALWAYS WANTED TO KNOW ABOUT CREDITOR PROTECTION AND DIDN’T EVEN THINK TO ASK.

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and a guest to be determined will present WHAT TAX PLANNERS NEED TO KNOW ABOUT NORTH DAKOTA TRUST LAW for Bloomberg BNA.

Date: Wednesday, September 9, 2015 | Time TBA

Location: Online webinar

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com

**********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

**********************************************************

LIVE WEBINAR:

Alan Gassman, Christopher Denicolo, and Kenneth Crotty will present a 50-minute webinar entitled CREATIVE PLANNING FOR FLORIDA REAL ESTATE with a guest (victim) to be determined. This presentation will be free and worth every dollar!

There will be two opportunities to attend this presentation. This webinar will qualify for CLE and CPE credit.

Date: Wednesday, September 23, 2015 | 12:30 PM or 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and Lee-Ford Tritt will present a webinar on the topic of WHETHER TO MARRY AND WHAT TO CONSIDER: A TAX AND ESTATE PLANNER’S GUIDE TO COUNSELING SAME-SEX COUPLES WHO MAY TIE THE KNOT for Bloomberg BNA.

Date: Wednesday, September 30, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE PINELLAS COUNTY PRESENTATION:

Christopher Denicolo will be speaking at the Pinellas County Estate Planning Council meeting on the topic of PLANNING WITH IRAs AND QUALIFIED PLANS.

Date: Monday, October 5, 2015

Location: To Be Determined

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Christopher Denicolo at christopher@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Christopher Denicolo will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

**********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)
 

LIVE TAMPA EVENT:

TAMPA THEATRE 14TH ANNUAL WINEFEST

Bust out your sweet dance moves and come have a “killer time” with Napoleon, Pedro, Kip, and Lafawnduh at Tampa Theatre’s 14th annual WineFest, Napoleon Wineamite. This year’s event features snacks and samples from local independent restaurants, sips from the finest wineries, and evening of rare, top-rated wines and – for the first time this year – a “Movie Under the Stars” screening of this year’s theme, Napoleon Dynamite.

While the theme may be silly, the purpose is most serious. Now in its 14th year, the annual WineFest is Tampa Theatre’s biggest fundraising event of the year, benefitting the historic movie palace’s artistic and educational programs, as well as its ongoing preservation and restoration.

Date: September 10 – 17, 2015

Location: Tampa Theatre | 711 N. Franklin Street, Tampa, FL 33602

Additional Information: Tickets are on sale now at www.tampatheatre.org/winefest. Sponsorship opportunities are also available. Please contact Maggie Ciadella at maggie@tampatheatre.org for more information about sponsorship or the event.

**********************************************************

LIVE ORLANDO PRESENTATION: 

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING 

Date: January 11 – January 15, 2016 

Location: To be announced 

Additional Information: Information on the 50th Annual Heckerling Institute on Estate Planning will be available on August 1, 2015. To learn about past Heckerling programs, please visit http://www.law.miami.edu/heckerling/.

**********************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins, which is not affiliated with Anthony Hopkins.

Please provide us with your input for other topics for this year and next! Watch this space for more speaker and topic announcements.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

July Applicable Rates

The Thursday Report – 7.16.15 – Tom waits for Closing (Time) Letters

Posted on: July 16th, 2015

Closing (Letter) Time

Firing on All Pistons – Who SCIN’d Who?

Cigna Files Lawsuit Against 11 Surgery Centers for Waiving Co-Pays – Will Doctor’s Offices Be Next?

Life Insurance Definitions, Part II

Richard Connolly’s World – Keeping Up with the IRS

Thoughtful Corner – Knowing When to Fold ‘Em

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Closing (Letter) Time

Nothing feels better to an estate tax planner than receiving a Closing Letter from the IRS, which indicates that the estate tax return examination and review resulted in a no change or negotiated final conclusion that no further estate tax will be owed and that the file is closed by the IRS. For decades, these letters have been issued at the time that the IRS closes its file, but now, it will be necessary to affirmatively ask for the letter.

Will asking and then reminding the IRS for a Closing Letter cause them to look at an estate situation that they might have otherwise missed? Will it be best to wait until the statute of limitations has run out before asking for a Closing Letter, and thus, extend the administration of a probate estate if the judge requires a Closing Letter for the estate to be closed?

Last night’s LISI commentary by board-certified tax attorney Chuck Rubin gives more background on this new planning question. Click here to read Chuck’s commentary on the LISI website.

*****************************

Executive Summary:

In a change to long-standing policy, the IRS will now require estates to request a closing letter if they want to receive one.

Facts:

The IRS issues closing letters to estates for federal estate tax purposes, acknowledging that it has accepted the estate tax return as filed or as adjusted pursuant to audit. This used to be an automatic process. In most cases, there will not be any further adjustments made by the IRS to the return after the closing letter is issued. Nonetheless, the IRS can still open or reopen an audit if there was a misstatement or fraud.

In a June 16, 2015 update to the IRS’ “Frequently Asked Questions on Estate Taxes,” (which can be viewed by clicking here) the IRS has indicated that for federal estate tax returns filed on or after June 1, 2015, closing letters will be issued only if the taxpayer requests it. The IRS also requests that such requests not be submitted until four months after the return is filed.

The FAQ also provides a table that details when a closing letter will be issued for returns filed between January 1, 2015 and June 1, 2015, depending on variables such as whether the filing threshold was met, whether a portability election was made or denied, and whether the return was filed pursuant to Rev. Proc. 2014-18.

Comment:

The new requirement does not yield any obvious benefit to taxpayers. Instead, it is just one more thing that will need to be added to the estate administration checklist. That the request should not be made until four months after filing adds to the inconvenience since the logical time to request it would be when the return is filed.

It is unclear if all returns will still receive a preliminary review by the IRS, as was required in the past so as to issue the closing letter. If not, then this raises the interesting question as to whether requesting the closing letter may trigger a return review that might not otherwise have occurred without the request. It may be that the IRS will be cutting back on the preliminary reviews, but just for returns making a portability election that are under the filing threshold.

The corollary question is whether it may be advantageous then to not request a closing letter to reduce audit risk. In many circumstances, not getting a closing letter is a nonstarter. For example, many local probate courts require a closing letter before they will close a probate administration, and title companies may require one in insuring real property passing at death. In other circumstances, fiduciaries who do not want to wait until the three-year statute of limitation runs on the estate tax return before making distributions will still want the closing letter to minimize risk in distribution before such statute of limitations expiration (or if such fiduciaries do not want to deal with impatient beneficiaries or probate court judges who are not desirous of waiting out the three-year period before inheritances are fully distributed.)

Should one request a closing letter for an estate that is making a portability election but is under the filing threshold? It’s unlikely that the closing letter establishes that the portability election was properly made per the particular portability requirements such as a “complete” return since the closing letter does not go to completeness, but requesting a closing letter may still fall in the category of “can’t hurt.”

How should the request be made? The website is silent – likely a letter requesting a closing letter should suffice.

It is not clear why filings under Rev. Proc. 2014-18 are included in the table addressing whether a closing letter will be issued for returns filed under that Revenue Procedure between January 1 and June 1, 2015, since filings on that procedure were due no later than December 31, 2014. This may be an error.

********************************

Those of us who love Tom Waits, and love Estate Tax Closing Letters even more, will appreciate both Chuck Rubin’s LISI Newsletter and Tom Wait’s album and song “Closing Time.” You can click here to listen to the whole album, or jump forward to 4:55 to hear “Closing Time” or to 41:00 to hear a more rousing version of “Closing Time,” which is the best song ever to play while cleaning your office. Then, before you decide whether or not to take that next case without a retainer, check out “I Hope That I Don’t Fall in Love With You” beginning at 3:55.

We thank Steve Leimberg and Chuck Rubin for granting permission to share this story with Thursday Report readers.

Firing on All Pistons – Who SCIN’d Who?
Since When is $388 Million a Great Deal?
by Alyssa Eberle, J.D.

In an estate tax battle of gargantuan proportion, the Internal Revenue Service received $388 million in a settlement with the estate of Detroit Pistons owner William “Bill” Davidson. The IRS had originally asserted a deficiency of over $2 billion in estate, gift, and generation-skipping taxes.[1]

Davidson was born in Detroit, Michigan. At a young age, he took over his family’s business, Guardian Industries, one of the world’s leading makers of glass, automotive, and building parts. Davidson later went on to own the Detroit Pistons, the WNBA Detroit Shock, and our very own Tampa Bay Lightning. Davidson was worth about $5.5 billion during his lifetime, earning him a spot as Forbes’ 62nd richest American in 2008.[2] With the fortune he created through his business ventures, Davidson had trusts drawn up for his wife, children, and grandchildren that were worth tens of millions of dollars.

Shortly before his death, Davidson engaged in a variety of estate planning transfers, including gifts and sales to the number of different trusts he had established. Davidson had used traditional installment notes for sales to various trusts as well as sales of Guardian shares to other trusts in exchange for self-cancelling installment notes (SCINs). On January 2, 2009, a little less than three months before Davidson’s death, additional shares in Guardian were sold to trusts in exchange for SCINs. Each of those SCINs had a 5-year term, with a balloon payment of principal at the end of the term, with a 2.4% interest rate.[3] Other SCINs were issued two months prior to the death of Davidson. Soon after these SCINs were issued, Davidson was diagnosed with a medical condition that resulted in his death. Davidson died on March 13, 2009 at the age of 86. Ultimately, no payments were ever made on any of the SCINs because Davidson died before the interest payments were even due.

At the time of his death, Davidson’s estate was estimated to be worth $3 billion. His estate attorneys claimed that they ensured that all estate taxes had been paid to the Internal Revenue Service (IRS). Still, in May of 2013, four years after the death of Davidson, the IRS filed a notice of deficiency, alleging $2.8 billion in underpayments in estate taxes, gift taxes, and penalties. In response, Davidson’s estate brought the IRS to US Tax Court to challenge the assessment of the additional taxes. In their petition, the estate claimed that the IRS had mistakenly concluded that the value of the stocks transferred into the trust were more than the estate had claimed. The estate attorney asserted that the IRS severely overvalued those stocks, noting that after Davidson’s death, the stock values plummeted and it was “foreseeable…Guardian sales and profits would decline substantially.”[4]

The IRS responded in their answer, challenging the valuation on the self-cancelling installment notes (SCINs) that Davidson had used to transfer assets to his heirs. The IRS argued that because the payments on those SCINs were too low, some of the assets transferred should be viewed as gifts. The IRS argued that their method of determining the value was more reliable than that used by Davidson.[5] Further, the IRS contends that Davidson transferred the assets in anticipation of a five-year life expectancy, which, they contend, was longer than realistic. Tens of millions of dollars were also transferred to his wife, which she used to help her daughter and son-in-law build a house. The IRS also called this a gift. If the IRS were to be completely successful in the claim, the Service would be collecting approximately ten percent of the total estimated wealth transfer tax receipts for the year.[6]

SCINs as Estate Planning Tools and the IRS’ Litigation Position

A SCIN is an instrument used for estate tax purposes; they “freeze” the value of the asset while passing future appreciation without incurring any transfer taxes.[7] The way this is done is by selling an asset to a trust in exchange for a promissory note with interest imposed at the applicable federal rate. If done properly, upon the seller’s death, the asset sold is not included in the seller’s estate; instead, the fair market value of the promissory note is included in the seller’s gross estate.[8] Another variation on this concept is a SCIN: when the seller receives a source of repayment that will terminate upon the seller’s death, resulting in that repayment obligation not being included in the gross estate.[9]

With a SCIN, if the seller dies prior to the end of the term, then the purchaser of the note will not owe any additional consideration given to the seller. This additional consideration is referred to as the “risk premium,” which results in the note providing for higher payments.[10] The problem that estate attorneys and advisors have is determining how to calculate the appropriate amount of risk premium to ensure that there are adequate considerations to avoid the sale being treated as a gift.

The August 2013 Chief Counsel Advice (CCA) 201330033 declared the IRS’s litigation position regarding SCINs. Prior to the CCA 201330033, there was no Internal Revenue Code Section, Treasury Regulation, IRS Pronouncement, or court case directing how to calculate risk premiums for SCINs.[11] While the debate on how to calculate the premium numbers varies, the majority of advisors have used Section 7520 interest rates and IRS published mortality tables “which anecdotal evidence suggest are typically used by IRS agents in audits regarding SCINs where there are no particular health issues.”[12]

The seller’s health at the time of the sale is an important factor when determining whether the mortality tables may be relied upon for calculation of the risk premium.[13] According to the Treasury Regulation §25.7520-3(b)(3), mortality tables have been heavily relied upon for determining the actuarial calculation if the individual is not “terminally ill.”[14] According to the regulation, someone is defined as terminally ill when the individual “is known to have an incurable illness or other deteriorating physical condition…if there is at least a 50 percent probability that the individual will die within 1 year.”[15]

CCA 201330033 addressed the issues relating to Davidson’s SCINs and their valuation. The CCA surprised the estate planning community by announcing a major departure from the previously accepted method of valuing the risk premium associated with SCINs. Instead of using the traditional “terminally ill” test, the CCA concluded that the risk premiums for SCINs “should be valued based on a method that takes into account the willing-buyer willing-seller standard of §25.2512-8 and should also account for the decedent’s medical history on the date of the gift.”[16] The Chief Counsel’s Office further determined that “the terminally ill test can be disregarded[b]y its terms, §7520 applies only to value an annuity, any interest for life or term of years, or any remainder.”[17]

The IRS’ analysis of the issue centers on the decedent’s life expectancy at the time of the gift:

We do not believe that the §7520 tables apply to value the notes in this situation. By its terms, §7520 applies only to value an annuity, any interest for life or term of years, or any remainder. In the case at hand, the items that must be valued are the notes that decedent received in exchange for the stock that he sold to the grantor trusts. These notes should be valued based on a method that takes into account the willing-buyer willing-seller standard in §25.2512-8. In this regard, the decedent’s life expectancy, taking into consideration the decedent’s medical history on the date of the gift, should be taken into account.[18]

The CCA’s Office rejected the traditional practice of valuing SCINs using actuarial tables promulgated under Section 7520 and using the terminally ill test as applied to a SCIN, instead providing that the SCIN valuation “must account for the amount a willing buyer would pay a willing seller upon the execution date of the SCIN.”[19] This statement represents a significant departure from the generally accepted method and would play a significant impact on their argument in the Davidson case.

Davidson Settlement

The Davidson case could have provided the Tax Court with an opportunity to clarify how a SCIN risk premium should be calculated. However, the case was ultimately settled by a stipulated decision entered into on July 6, 2015. It was therefore impossible to see how the valuation of the risk premium was resolved. However, what was made clear through that settlement was that there was a significant taxpayer victory. The total transfer liability stipulated was just over $380 million, a small fraction of the $2.7 billion deficiency that the IRS initially had assessed. The breakdown of the deficiencies in gift tax was as follows:[20]

Davidson Chart 1

The breakdown of deficiency in estate tax was as follows:[21]

Davidson Chart 2

The breakdown of generation-skipping transfer tax deficiency is as follows:[22]

Davidson Chart 3
These numbers could have been vastly different had the case not come to a settlement. Other additional issues could have impacted the numbers, such as whether the SCIN was a bona-fide debt, and whether the shares had been valued properly – or at least valued in a way the IRS approved of. While the SCIN transactions ultimately worked well for the Davidson family, SCINs are proving to be vehicles that involve a risk versus reward balancing act. While the CCA does not have any precedential authority and the Davidson case has no binding effect on the taxpayer, those who are willing “to cross the line in the sand that may be moved by waves, tides, and sad kicking bullies in the years to come” should continue using SCINs as an estate planning tool.[23] As the Davidson case demonstrated, the taxpayer was much better off engaging in SCIN planning than having done no additional estate planning at all. Unfortunately, taxpayers and estate planners will not receive any clarification from the Tax Court as to the method for valuing SCINs any time soon. SCINs will continue to be an effective estate planning strategy, so long as a careful review of the transaction has been completed.

**********************************************
[1] Ashlea Ebeling, IRS Grabs $388 Million From Billionaire Davidson Estate, Forbes, July 8, 2015. To put the amount in perspective, consider that the Treasury took in a total of $12.7 billion in estate tax revenue in 2013, according to Forbes magazine.
[2] Forbes Magazine, The 400 Richest Americans, Sept. 17, 2008.
[3] LISI Estate Planning Newsletter #2322 (July 14, 2015) at www.leimbergservices.com. The 2.4% interest rate was the Section 7520 rate as opposed to the AFR rate for January 2009.
[4] Id.
[5] Todd Spangler, IRS Lawyers Defend $2B Tax Bill to Bill Davidson Estate, Detroit Free Press, August 18, 2013.
[6] LISI Estate Planning Newsletter #2135 (August 28, 2013) at http://LeimbergServices.com.
[7] Id.
[8] Id.
[9] Id.
[10] Crotty, Hesch, Wojnaroski, and Gassman, IRS Position Puts More Skin in the Game of Using SCINs.
[11] LISI #2322.
[12] Id citing Steve Akers, The Forty-Ninth Annual Heckerling Institute on Estate Planning, Estate Planning Issues with Intra-Family Loans and Notes, Chapter 5, 92-93 (2015).
[13] LISI #2322.
[14] Id.
[15] Treas. Reg. §25.7520-3(b)(3).
[16] CCA 201330033.
[17] Id.
[18] IRS Ge. Couns. Mem. 39503 (May 7, 1986).
[19] Ken Crotty, Jerome Hesch, Edward Wojnaroski, and Alan Gassman, IRS Position Puts More Skin in the Game of Using SCINs, Estate Planning, January 2014.
[20] Estate of William M. Davidson v. Comm’r, US Tax Court No. 013748-13, (filed June 14, 2013, stipulated decision entered July 6, 2015).
[21] Id.
[22] Id.
[23] See Ken Crotty, Jerry Hesch, and Alan Gassman, LISI Estate Planning Newsletter #2147 (Sept. 24, 2013).

Cigna Files Lawsuit Against 11 Surgery Centers for Waiving Co-Pays
Will Doctor’s Offices Be Next?

by Jeanne E. Helton

Jeanne Helton

Jeanne E. Helton is an attorney and shareholder at Smith Hulsey & Busey in Jacksonville, Florida. She practices in Health Care, Intellectual Property, and Corporate, Securities, and Business Law, with a focus on the representation of health providers, including health systems, physicians, insurance entities, medical suppliers, continuing care retirement communities, ambulatory surgery centers, and more. She received her J.D. from the University of Florida.

On July 6, 2015, Connecticut General Life Insurance Company and Cigna Health and Life Insurance Company (collectively “Cigna”) filed a complaint against eleven ambulatory surgery centers (“ASCs”) and two ambulatory surgery center development entities. The Complaint alleges that the development companies and the ASCs conspired to engage in fraudulent “dual pricing” and “fee forgiving” schemes, whereby the ASCs charged their patients little or nothing for out-of-network medical services while charging “exorbitant” rates to the patients’ insurance plans administered through Cigna. The ASCs did not have contractual arrangements with Cigna and, therefore, were “out-of-network” or “non-participating.”

The complaint alleges that the ASCs calculated their patients’ cost sharing responsibility by applying a 150% multiplier to Medicare rates for services performed by the ASC and then discounting those rates by the portion that the patients would have paid had they seen an in-network provider. The Complaint further alleges that when calculating Cigna’s charge, the ASCs utilized an 800% multiplier of Medicare rates (rather than 150%) resulting in tens of thousands of dollars of charges in excess of the rates charged for the patient responsibility component of the charges. Cigna is asserting that the inflated charges imposed by the ASCs on the carrier were fraudulent as they bear no relation to the charges imposed on the patients.

The Complaint reiterates some of the authorities advising that routine forgiveness of waiver or copayments may constitute fraud under state and federal law, including the AMA Ethics Advisory Opinion 6.12 (1993), the OIG Special Fraud Alert in 1994, and Florida Statutes §817.234. The Complaint alleges the surgery development company’s affiliated ASCs alone had induced Cigna to pay millions of dollars to the ASCs as a result of this fee-forgiving scheme. The Complaint states that the inflated “charges” submitted to Cigna by the ASCs were not their “normal charge” for the services at issue because these were not the charges that the ASCs actually charged to their patients. Rather, the “charges” submitted to Cigna were “phantom” charges bearing no relation to the charges submitted to patients.

The defendant ASCs and surgery center development companies have not yet filed an answer to the Complaint, a copy of which can be accessed below. This Complaint is further evidence of the types of patient “kickback” activities that were discussed in Lester Perling’s recent webinar “Financial Arrangements with Patients, Co-Payments, Gifts, and Graft,” available for viewing by clicking here.

You can read the complaint in its entirety by clicking here.

Life Insurance Definitions, Part II

This is a continuation of our series on life insurance fluency and is derived from the materials that we are preparing for the September 17th and 18th Notre Dame Tax Institute (please don’t miss this! Click here for more information.)

How many of the following definitions do you know?

Insurance Definitions 1

Insurance Definitions 2

We thank Barry Flagg of Veralytic for his co-authorship of our life insurance materials. Please stay tuned for further important information.

Richard Connolly’s World
Keeping Up with the IRS

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with links to the articles.

This week, the first article of interest is “IRS to Allow Do-Overs for Some Estates” by Ashlea Ebeling. This article was featured on Forbes.com on July 2, 2015.

Richard’s description is as follows:

Smaller estates may get a break, but larger estates are out of luck if they fail to timely claim a newfangled way to save estate taxes. That’s the conclusion the Internal Revenue Service came to in the final regulations on the portability of a deceased spousal unused exclusion amount. It’s as confusing as it sounds, but if you or your surviving spouse could be in estate tax territory, pay attention.

The final rules say that as long as the estate’s value is below the exclusion amount ($5.43 million for 2015), you will be able to file for Sec. 9100 relief to elect portability even if you’re past the 15-month extended filing period for filing as estate tax return. The IRS will probably grant it, allowing you to restore the DSUE for the surviving spouse.

The IRS took a tougher approach for larger estates. The final rules say that for estates valued above the exclusion amount, the only way to guarantee a portability election is to file an estate tax return when the first spouse dies.

Please click here to read this article in its entirety.

The second article of interest this week is entitled “IRS Takes Aim at an Estate-Planning Strategy” by Liz Moyer. This article was featured in The Wall Street Journal on June 26, 2015.

Richard’s description is as follows:

The Internal Revenue Service is taking aim at the way wealthy families value certain assets they are passing along to heirs, a move that could crimp estate planning.

Family limited partnerships and limited liability companies long have been used to help pass family-owned businesses to younger generations in a way that may reduce gift or estate taxes. They also have been used in recent years to pass down portfolios of publicly traded securities at a discount, something the IRS is looking to end, some estate lawyers say.

Based on recent comments by IRS officials at industry gatherings, lawyers expect the department will propose to significantly limit or prevent these discounts, especially for entities holding primarily marketable securities.

This article may be the encouragement a client needs to move forward with a recommended FLP or LLC.

Please click here to read this article in its entirety.

Thoughtful Corner
Knowing When to Fold ‘Em

We often counsel clients who have challenging situations, and perseverance is certainly an admirable trait and quite often, the best strategy for a given situation.

On the other hand, how logical are our choices, and when and how does someone (or an organization) that has invested significant time, money, and emotion on a given project or challenge come about deciding that it is time to fold up the tent and find a more worthy use of future time, money, energy, and emotion?

Professional development coach Rick Solomon, CPA, applies what is known as the Sedona Method of Releasing to situations that may be impacted by personal tendencies that are beyond awareness of the decision-maker.

Three questions that he asks are as follows:

  1. Is the decision or lack of a decision the result of an innate need for recognition or to avoid negative recognition? Is that rational, and does it serve you well?
  2. Is the decision or lack of a decision due to an innate need for security, and is the need realistic or somehow contrived by your personal psychology?
  3. Is the decision or lack of a decision the result of an innate need for control, and is it logical and actually useful or necessary for you to have control?

During each of the above three short conversations, Rick asks whether the person holding the need can release it in order to have better results with the situation and overall enhanced recognition, security, and control.

So when you are providing representation for a client that may be heading your project towards what might look like Custer’s Last Stand, or if you cannot be sure with respect to this, you can have the “Know when to hold ‘em and know when to fold ‘em” conversation and discuss potential better uses for the time, money, energy, and emotion being expended on the road that they are then traveling.

Some things to consider are as follows:

  • Cost in money; Cost in lost opportunities
  • Loss in personal time; Loss in energy
  • Odds of outcome; Value of outcome
  • Second opinion of odds of outcome & possible value of the outcome
  • Distortion by need for recognition, for control, for security
  • Alternatives to folding completely
    • Make an offer to settle
    • Use the 80/20 rule and get 80% of the solution for 20% of the time, effort, cost, or risk, if possible

Examples of situations where “folding ‘em” might work best include the following:

  1. Relationship situations – drop the relationship with as little effort and damage as possible
  2. Participation in organizations
  3. Trying to get things done within an organization
  4. Hobbies, trips, or endeavors that you are really no longer passionate about

Also, do not forget the feeling of joy and liberation when the mental baggage that comes with a project or responsibility can be cast aside.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

*******************************

IN THE NEWS
by Ron Ross

The Governor of Florida authorizes a bear-hunting season in a desperate attempt to prevent another Ted movie from being made.

Hunter

**********************************

Toy stores across the nation report that while action figures for the new Jurassic World movie are selling very well, the all-time best-selling action figure is the T-Rex from the original Jurassic Park movie.

Rexy

The second best-seller? The lawyer who gets eaten by the T-Rex in the original film.

Upcoming Seminars and Webinars

Calendar of Events

LIVE CLE TELECONFERENCE PRESENTATION:

Alan Gassman will serve as a speaker and panelist for an ABA Probate, Estate Planning and Trust section CLE teleconference on the topic of JEST planning as one of six participants in what will be a very interesting and practical collaborative presentation entitled COMPARING AND CONTRASTING VARIOUS METHODS TO ACHIEVE A STEP-UP BASIS ON A MARRIED COUPLE’S APPRECIATED ASSETS AT FIRST DEATH IN NON-COMMUNITY PROPERTY STATES.

Attorney David Slenn with Quarles Brady will moderate the conference. Other panelists include Edwin Morrow, III and Jim Blase.

Date: Tuesday, July 21, 2015 | 1:00 PM – 2:30 PM

Location: Teleconference

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Edwin Morrow at edwin_p_morrow@keybank.com.

**********************************************************

LIVE ORLANDO PRESENTATION:

ORLANDO BUSINESS AND PROFESSIONAL PRACTICE OWNER SYMPOSIUM

Alan S. Gassman, business coach and author David Finkel, and others will present a two-day conference for high-net-worth business and professional practice owners sponsored by Maui Mastermind®.

Alan’s topics will include BASIC AND ADVANCED PLANNING TECHNIQUES FOR THE PROTECTION OF WEALTH, THE 10 BIGGEST MISTAKES THAT BUSINESS OWNERS AND PROFESSIONALS MAKE, and ESTATE TAX AVOIDANCE TECHNIQUES FOR BUSINESS OWNERS AND PROFESSIONALS.

Other topics include A Proven Map to Grow Your Business and Get Your Life Back, Building Wealth Outside of Your Company, Tax Reduction Strategies, and Understanding How Investments Work and What They Cost.

Date: July 30th and 31st, 2015

Location: Hyatt Regency Orlando | 9801 International Drive, Orlando, FL 32819

Additional Information: Interested individuals can contact agassman@gassmanpa.com or David Finkel at david@mauimastermind.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

I was fortunate to attend the Law Practice and Professional Development Workshop conducted by Alan Gassman, Esq. in Clearwater, Florida on August 3, 2014.  The Workshop covered a wide range of topics from Goal Setting and Gratitude to as practical a topic as law office logistics.  Alan’s approach was intimate, self-revelatory and highly instructive.  I have been practicing law for 20 years and have never attended a program as broad ranging, practical and encouraging.  The depth of Alan’s thought and experience is obvious in the materials and in the ease with which he led the discussions.  This was not a dull lecture but a highly engaging workshop that was over before you expected it to be.

Daniel Medina, B.C.S
Board Certified in Wills, Trusts and Estates
Medina Law Group, P.A.

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

**********************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on the topic of EVERYTHING YOU ALWAYS WANTED TO KNOW ABOUT CREDITOR PROTECTION AND DIDN’T EVEN THINK TO ASK.

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and a guest to be determined will present WHAT TAX PLANNERS NEED TO KNOW ABOUT NORTH DAKOTA TRUST LAW for Bloomberg BNA.

Date: Wednesday, September 9, 2015 | Time TBA

Location: Online webinar

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com

**********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

**********************************************************

LIVE WEBINAR:

Alan Gassman, Christopher Denicolo, and Kenneth Crotty will present a 50-minute webinar entitled CREATIVE PLANNING FOR FLORIDA REAL ESTATE with a guest (victim) to be determined. This presentation will be free and worth every dollar!

There will be two opportunities to attend this presentation. This webinar will qualify for CLE and CPE credit.

Date: Wednesday, September 23, 2015 | 12:30 PM or 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and Lee-Ford Tritt will present a webinar on the topic of WHETHER TO MARRY AND WHAT TO CONSIDER: A TAX AND ESTATE PLANNER’S GUIDE TO COUNSELING SAME-SEX COUPLES WHO MAY TIE THE KNOT for Bloomberg BNA.

Date: Wednesday, September 30, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE PINELLAS COUNTY PRESENTATION:

Christopher Denicolo will be speaking at the Pinellas County Estate Planning Council meeting on the topic of PLANNING WITH IRAs AND QUALIFIED PLANS.

Date: October 5, 2015

Location: To Be Determined

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Christopher Denicolo at christopher@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Christopher Denicolo will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

**********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)

 LIVE TAMPA EVENT:

TAMPA THEATRE 14TH ANNUAL WINEFEST

Bust out your sweet dance moves and come have a “killer time” with Napoleon, Pedro, Kip, and Lafawnduh at Tampa Theatre’s 14th annual WineFest, Napoleon Wineamite. This year’s event features snacks and samples from local independent restaurants, sips from the finest wineries, and evening of rare, top-rated wines and – for the first time this year – a “Movie Under the Stars” screening of this year’s theme, Napoleon Dynamite.

While the theme may be silly, the purpose is most serious. Now in its 14th year, the annual WineFest is Tampa Theatre’s biggest fundraising event of the year, benefitting the historic movie palace’s artistic and educational programs, as well as its ongoing preservation and restoration.

Date: September 10 – 17, 2015

Location: Tampa Theatre | 711 N. Franklin Street, Tampa, FL 33602

Additional Information: Tickets are on sale now at www.tampatheatre.org/winefest. Sponsorship opportunities are also available. Please contact Maggie Ciadella at maggie@tampatheatre.org for more information about sponsorship or the event.

**********************************************************

LIVE ORLANDO PRESENTATION: 

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING 

Date: January 11 – January 15, 2016 

Location: To be announced 

Additional Information: Information on the 50th Annual Heckerling Institute on Estate Planning will be available on August 1, 2015. To learn about past Heckerling programs, please visit http://www.law.miami.edu/heckerling/.

**********************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins, which is not affiliated with Anthony Hopkins.

Please provide us with your input for other topics for this year and next! Watch this space for more speaker and topic announcements.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

July Applicable Rates

The Thursday Report – 7.9.15 – Tampa WineFest and More!

Posted on: July 9th, 2015

The Supreme Court’s Decision on Same-Sex Marriage with Alan Gassman and Mike Reedy on WUSF Radio

Claiming Social Security Benefits and Other New Opportunities for Same-Sex Married Couples by Michael Kitces

Life Insurance Definitions, Part I

Tampa Theatre 14th Annual WineFest – September 10-17

Richard Connolly’s World – Estate Planning Pitfalls to Avoid

Thoughtful Corner – The Resilience Response

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

The Supreme Court’s Decision on Same-Sex Marriage with Alan Gassman and Mike Reedy on WUSF Radio

Radio Show Pic

Alan Gassman appeared on WUSF radio on July 7th and was interviewed on the impact of the recent US Supreme Court’s decision regarding same-sex marriage, which requires all states to recognize same-sex marriage and to grant spouses all of the same rights and privileges accorded to opposite sex spouses.

Alan recently had the following to say about planning for same-sex couples:

The day has arrived for same-sex couples to do the math and make the hard decisions regarding whether or not to take advantage of this new opportunity in the face of well over a dozen important legal, tax, social, and other planning factors. There will doubtlessly be many errors made and many estate plans distorted by well-meaning new married couples who thought with their hearts but not with their accountants, lawyers, and wallets.

Equality Florida Statewide Organizer Mike Reedy joined Alan on the show hosted by Carson Cooper, the description for which reads as follows:

Same-sex couples have been able to marry in Florida since January 6, 2015. On June 26, the US Supreme Court ruled that same-sex marriage is legal nationwide. What are the impacts of this ruling on Florida’s same-sex couples? What questions are they asking as they consider tying the knot? We check in again with Clearwater attorney Alan Gassman, author of The Florida Legal Guide for Same-Sex Couples, and Mike Reedy with Equality Florida.

We received the following message via email after the initial broadcast of the show:

Alan,

I listened to your talk on NPR this evening. You were very professional and informed. I appreciate your dedication to this important area.

Sign 2

You can hear a replay of the entire broadcast on WUSF Radio’s website by clicking here.

You can also listen to Alan and Mike’s first WUSF appearance, regarding the January 2015 change in Florida law regarding same-sex marriage by clicking here.

Click here to purchase The Florida Legal Guide for Same-Sex Couples or here for The Florida Advisor’s Guide to Counseling Same-Sex Couples by Alan Gassman, Danielle Creech, and Kristen Sweeney.

Thanks to Lottie Watts, Carson Cooper, and everyone at WUSF Radio!

Claiming Social Security Benefits and Other New Opportunities for Same-Sex Married Couples
by Michael Kitces

Kitces Picture

Michael E. Kitces, MSFS, MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL, is a nationally recognized speaker and sought-after commentator on financial planning issues. He also writes extensively on a broad range of advanced financial planning topics. He is the co-author of books such as The Advisor’s Guide to Annuities and Tools & Techniques of Retirement Income Planning. He is currently a Director of Planning Research and a Partner at Pinnacle Advisory Group, Inc.

The following article was originally published on the blog Nerd’s Eye View: Commentary on Financial Planning News and Developments by Michael E. Kitces on July 1, 2015. Excerpts from the article are re-produced below.

To see the complete article, please click here.

While the case of United States v. Windsor in 2013 required the Federal government to recognize the marriage of a same-sex couple if the marriage was legal where performed, states were not required to permit same-sex marriage, nor were they required to recognize legal marriages of same-sex couples performed elsewhere. However, with last week’s Supreme Court decision in the case of Obergefell v. Hodges, states are now required to permit same-sex couples to be married and furthermore, must recognize same-sex marriages performed in other states and jurisdictions.

The Supreme Court’s decision creates several immediate new planning opportunities for same-sex married couples, particularly those who were previously married in another states but have been recently living in a state that did not recognize (or one of the 13 that outright banned) their marriage. Those couples will now be able to do everything from filing joint income tax returns, to benefit from the marital deduction for state estate and inheritance tax purposes, to get divorced if the couple decides to separate. In fact, for many such couples, a major planning issue will simply be unwinding the strategies previously in place to handle the fact that their marriage wasn’t recognized but are no longer necessary!

Perhaps most financially significant, though, is that same-sex married couples will now be able to claim spousal and survivor benefits as a married couple, regardless of their current state of residence. This creates both immediate Social Security claiming opportunities for some same-sex couples and the need to plan more proactively for a same-sex married couples’ Social Security benefits in the future, as all the claiming strategies for married couples – including file-and-suspend and restricted application – are now available.

On the other hand, the Supreme Court decision actually makes financial planning for same-sex couples far simpler in the future – or, at least, no more complicated than the conversations that arise when any couple is considering whether to marry and how it might impact them from income tax planning to financial aid to estate planning and everything in between. In fact, as the legal differences for marriage between same-sex and heterosexual couples shrink to almost nothing, it remains to be seen whether LGBT planning will even remain as a distinct ‘niche’ amongst financial advisors – as while potential discrimination against gays and lesbians remains an issue, equal marital rights appears to be eliminating most of the need or relevance of ‘specialized’ LGBT financial planning in the first place.

Same-Sex Marriage, Obergefell v. Hodges, and the Fourteenth Amendment

In 2013, the Supreme Court’s decision in the case of United States v. Windsor declared that Section 3 of the Defense of Marriage Act (DOMA) – which required that under Federal law, a marriage union must be between a man and a woman (and not a same-sex couple) – was unconstitutional under the Fifth Amendment. The outcome of the case was that the Federal government had to recognize an otherwise-legal same-sex marriage and allow the couple to be treated as married for Federal tax purposes, including filing joint tax returns as a married couple and eligibility for the marital deduction for estate tax purposes (which was the actual issue at hand in the Windsor case.)

However, the Windsor decision did not require states to allow same-sex marriages, nor did it require states to recognize a same-sex marriage from another state (even if it had to be recognized by the Federal government.) This, in turn, lead to confusing planning scenarios where same-sex couples were recognized as married for Federal purposes as long as the marriage ceremony was legal where it was performed (the “place of celebration”) but might not be recognized for state purposes if the couple’s current state of residence did not permit same-sex marriage.

On June 26, 2015, though, this distinction between “place of celebration” and “[current] state of residence” came to an end as the Supreme Court ruled in the case of Obergefell v. Hodges that marriage is a fundamental right under the Fourteenth Amendment between any two people, regardless of whether they are of the opposite or same sex. Accordingly, the right to marry is protected under the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and states cannot limit that right to marry, which means that states may no longer ban same-sex marriage and must not only issue marriage licenses to same-sex couples, but must also recognize such same-sex marriages that occurred in another state.

Social Security Benefits Planning for Same-Sex Married Couples

In the immediate aftermath of the Windsor decision in 2013, President Obama directed then-Attorney General Eric Holder to begin a process of reviewing all Federal rules and regulations to support the recognition of same-sex marriage under Federal law where feasible. As noted earlier, this directive led the Treasury and IRS to declare in Revenue Ruling 2013-17 that same-sex marriages would be recognized in the case of Federal tax law (for both income and estate tax purposes), as long as the same-sex marriage was legal at the “place of celebration” where the marriage ceremony legally occurred. However, in the case of Social Security benefits, the law technically stated that the determination of whether a couple is married is based on the couple’s current state of residence, and as a result, same-sex couples that were legally married in one location but moved to another where the marriage would not be recognized were not eligible for spousal and survivor benefits as a couple.

With the new Supreme Court ruling, though, a same-sex couple that was legally married must be recognized as married in every state, as states are no longer permitted to limit same-sex marriage or fail to recognize such marriages from another state. As a result, same-sex married couples living in a state that did not recognize their marriage have now suddenly become eligible for benefits as a married couple.

Suddenly becoming eligible for benefits as a couple can be a significant income bump for many same-sex (or any) married couples. This means a same-sex partner can receive spousal benefits (as long as the couple has been married for at least one year) as well as survivor benefits (as long as the couple was married at least nine months.) The dollar amounts of these Social Security benefits can be significant, potentially the equivalent of a retirement asset worth several hundred thousand dollars that has just become available now that the marriage is recognized!

In addition, the fact that the marriage is recognized also means that the various Social Security claiming strategies for married couples also becomes relevant. For instance, upon reaching full retirement age, one member of a same-sex married couple can now file-and-suspend to activate spousal benefits for his/her partner or file a restricted application to receive spousal benefits based on the other spouse’s record while delaying his/her own. Delaying Social Security benefits for at least one member of a same-sex married couple will often be more appealing now, as the availability of spousal and especially survivor benefits increases the potential for the couple to survive to requisite “breakeven” periods.

Notably, same-sex couples who are married and then get divorced have the potential to receive ex-spouse spousal or survivor benefits as well. Though, in order to be eligible, the marriage must have lasted for at least 10 years, and the couple then must be divorced for at least two years, which means few couples will likely be eligible now as same-sex marriage is still a ‘relatively recent’ phenomenon in most states. However, ex-spouse benefits may be increasingly relevant in the future, as more and more same-sex couples are married long enough to be eligible.

Though given that same-sex marriage has been permitted for many years in a number of states, for some couples, the sudden availability of Social Security benefits means the couple may actually wish to not only claim benefits now but try to claim benefits retroactively to when they were eligible. In point of fact, back in 2013 when the Windsor ruling occurred, same-sex couples were encouraged then to file for any benefits they might become eligible for if their otherwise-legal marriage became recognized in their current state, in order to protect against their potential loss of benefits. Accordingly, at a minimum, those who already filed for benefits but found them to be “pending” for the past two years may soon find those benefits paid. Whether a broader level of retroactive claiming will be permitted or not remains to be seen, but expect to hear further guidance from the Social Security Administration about whether or under what circumstances it will be possible to claim benefits retroactively for a same-sex couple that was already married but couldn’t claim Social Security spousal or survivor benefits because their state didn’t recognize the marriage until now.

Future of Financial Planning for the LGBT Community

Ultimately, the reality is that the full recognition of same-sex marriage across the entire United States should actually make financial planning for such couples far easier in the long run – at least relative to what it’s been in the past. Going forward, for better or worse, same-sex couples will generally face the exact same issues that any other couples – same-sex or heterosexual – must consider when deciding whether to marry.

Ironically, that means the Obergefell v. Hodges Supreme Court decision may even represent the beginning of the end of the “LGBT planning” as a specialty niche for financial advisors – at least as it pertains to the couples’ financial issues (though, notably, anti-discrimination protections against gays and lesbians outside of marriage are still a challenge in many states.) Accordingly, it remains to be seen whether or how designation programs like the Accredited Domestic Partnership Advisor (ADPA) may change to remain relevant in the future.

In the near term, though, the introduction of the right to marry for same-sex couples who lived in states that prohibited, as well as the sudden recognition of an existing marriage for same-sex couples who married legally but now reside in states that weren’t acknowledging the marriage, creates a wide array of immediate planning opportunities, from income and estate tax planning to health insurance and other employee benefits to unwinding ‘old’ strategies that are no longer relevant, and, perhaps most significantly, the availability of potentially significant Social Security spousal and survivor benefits.

To read more about new opportunities presented to same-sex couples after the June 26th Supreme Court decision, including planning for ‘married’ same-sex couples in states that previously prohibited same-sex marriage and financial and other issues for same-sex couples deciding whether or not to marry, please click here to read the article on Nerd’s Eye View.

Life Insurance Definitions, Part I

This is a continuation of our series on life insurance fluency. How many of the following definitions do you know?

Definitions 1

Definitions 2

Definitions 3

Tampa Theatre 14th Annual WineFest

Bust out your sweet dance moves and come have a “killer time” with Napoleon, Pedro, Kip, and Lafawnduh at Tampa Theatre’s 14th annual WineFest, Napoleon Wineamite. This year’s event features snacks and samples from local independent restaurants, sips from the finest wineries, and evening of rare, top-rated wines and – for the first time this year – a “Movie Under the Stars” screening of this year’s theme, Napoleon Dynamite.

While the theme may be silly, the purpose is most serious. Now in its 14th year, the annual WineFest is Tampa Theatre’s biggest fundraising event of the year, benefitting the historic movie palace’s artistic and educational programs, as well as its ongoing preservation and restoration.

This great event will take place September 10-17, 2015. Tickets are on sale now at www.tampatheatre.org/winefest.

Sponsorship opportunities are also available. Please contact Maggie Ciadella at maggie@tampatheatre.org for more information about sponsorship or the event.

Richard Connolly’s World
Estate Planning Pitfalls to Avoid

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with links to the articles.

This week, the first article of interest is “Estate Planning: It’s Never Too Early to Start” by Elizabeth O’Brien. This article was featured on MarketWatch.com on January 17, 2015.

Richard’s description is as follows:

A picture persists in the popular imagination of a grieving family huddled in the attorney’s office, anxiously awaiting a reading of the deceased’s will. That scene perpetuates some myths and mistakes of the estate-planning process, so it’s time to forget about it.

A copy of the will is typically mailed to all people named in it, so relatives rarely gather at the attorney’s office, elder law attorneys say. But more importantly, it’s generally a lousy idea to make your heirs wait until you die to learn the details of your estate plan.

In fact, some experts advocate beginning the estate-planning discussion when adult children are still in their 20s.

Consider: does your client need you to facilitate a family meeting to discuss the estate plan?

Please click here to read this article in its entirety.

The second article of interest this week is entitled “9 Estate Planning Pitfalls to Avoid” by Rachel F. Elson. This article was featured on FinancialPlanning.com on April 21, 2015.

Richard’s description is as follows:

In the attached article, attorney Jeff Scroggins says changes in both demographics and tax laws require a massive rethinking of estate planning strategies.

He also identifies and describes nine mistakes estate planners should avoid, including:

  1. No contingency planning for retirement assets
  2. Failing to account for unique personal property
  3. Not planning for Dad’s new romance
  4. Cutting corners in the estate plan
  5. Coming up short on incapacity planning
  6. Failing to plan for aging parents
  7. Not getting appraisals of assets that are not readily marketable assets
  8. Failing to ask clients, “Who do you trust?”
  9. Not considering income tax consequences of trusts

Please click here to read this article in its entirety.

Thoughtful Corner
The Resilience Response

Nelson Mandela once said, “The greatest glory in living lies not in never failing but in rising every time we fall.”

It is difficult to go through a week, let alone life, without challenges and obstacles, but one common trait I see in many of the impressive and successful people I represent is resilience.

It is easy to see a challenge or obstacle and to simply fold up the tent, give up, take a different direction, or follow the advice of someone who tells you an easy way out that will not get you where you thought you were going, but somewhere between stubbornness, never taking no for an answer, creativity, confidence, and the simple willingness to fight and not flee from a challenge situation is that magic of resilience.

We all face adversity, disappointment, and challenges that we may or may not be able to overcome, and while resiliency may seem to come naturally to some people, many of these behaviors can be learned. Here are three things you can do to become more resilient:

  1. Stay Positive

For many, when a negative experience hits, negative emotions are also common. People who are resilient tend to have the ability to experience not only negative but also positive emotions. People who are resilient absolutely acknowledge the bad experience, but they don’t let the negative emotions take over. They usually find the silver lining in the situation. After all, as Abraham Lincoln said, “We can complain because rose bushes have thorns, or we can rejoice because thorn bushes have roses.”

  1. Live and Learn

Although this may seem like a cliché, it’s definitely worth repeating. One of the best things you can do is learn from your experiences. Instead of sitting around, moping, and asking, “Why me?” reflect on the situation. See what happened to lead to the bad experience this time, and think about what you can do differently next time to lead to a more positive outcome.

  1. Show Kindness

Studies have found that acts of kindness boost serotonin, the neurotransmitter that is associated with happiness and well-being. These acts of kindness, such as volunteering in the community, tend to have a cumulative effect. Essentially, you can build a reservoir of happiness and resilience that you can draw from in the future.

If you have your doubts about the endless mishaps, bureaucracy, and disorganization that we all have to surmount, check out the YouTube video of a Sean Stephenson TED talk entitled “The Prison of Your Mind.” You can view this video by clicking here.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign Pic

*****************************

No Complaints

********************************

Black and White Case

Upcoming Seminars and Webinars

Calendar of Events

LIVE CLE TELECONFERENCE PRESENTATION:

Alan Gassman will serve as a speaker and panelist for an ABA Probate, Estate Planning and Trust section CLE teleconference on the topic of COMPARING AND CONTRASTING VARIOUS METHODS TO ACHIEVE A STEP-UP BASIS ON A MARRIED COUPLE’S APPRECIATED ASSETS AT FIRST DEATH IN NON-COMMUNITY PROPERTY STATES.

Attorney David Slenn with Quarles Brady will moderate the conference. Other panelists include Edwin Morrow, III.

Date: Tuesday, July 21, 2015 | 1:00 PM – 2:30 PM

Location: Teleconference

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Edwin Morrow at edwin_p_morrow@keybank.com.

******************************************************

LIVE ORLANDO PRESENTATION:

ORLANDO BUSINESS AND PROFESSIONAL PRACTICE OWNER SYMPOSIUM

Alan S. Gassman, business coach and author David Finkel, and others will present a two-day conference for high-net-worth business and professional practice owners sponsored by Maui Mastermind®.

Alan’s topics will include BASIC AND ADVANCED PLANNING TECHNIQUES FOR THE PROTECTION OF WEALTH, THE 10 BIGGEST MISTAKES THAT BUSINESS OWNERS AND PROFESSIONALS MAKE, and ESTATE TAX AVOIDANCE TECHNIQUES FOR BUSINESS OWNERS AND PROFESSIONALS.

Other topics include A Proven Map to Grow Your Business and Get Your Life Back, Building Wealth Outside of Your Company, Tax Reduction Strategies, and Understanding How Investments Work and What They Cost.

Date: July 30th and 31st, 2015

Location: Hyatt Regency Orlando | 9801 International Drive, Orlando, FL 32819

Additional Information: Interested individuals can contact agassman@gassmanpa.com or David Finkel at david@mauimastermind.com.

********************************************

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

I was fortunate to attend the Law Practice and Professional Development Workshop conducted by Alan Gassman, Esq. in Clearwater, Florida on August 3, 2014.  The Workshop covered a wide range of topics from Goal Setting and Gratitude to as practical a topic as law office logistics.  Alan’s approach was intimate, self-revelatory and highly instructive.  I have been practicing law for 20 years and have never attended a program as broad ranging, practical and encouraging.  The depth of Alan’s thought and experience is obvious in the materials and in the ease with which he led the discussions.  This was not a dull lecture but a highly engaging workshop that was over before you expected it to be.

Daniel Medina, B.C.S
Board Certified in Wills, Trusts and Estates
Medina Law Group, P.A.

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

****************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on the topic of EVERYTHING YOU ALWAYS WANTED TO KNOW ABOUT CREDITOR PROTECTION AND DIDN’T EVEN THINK TO ASK.

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and a guest to be determined will present WHAT TAX PLANNERS NEED TO KNOW ABOUT NORTH DAKOTA TRUST LAW for Bloomberg BNA.

Date: Wednesday, September 9, 2015 | Time TBA

Location: Online webinar

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanp.com

*******************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

*****************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

*************************************************

LIVE WEBINAR:

Alan Gassman, Christopher Denicolo, and Kenneth Crotty will present a 50-minute webinar entitled CREATIVE PLANNING FOR FLORIDA REAL ESTATE with a guest (victim) to be determined. This presentation will be free and worth every dollar!

There will be two opportunities to attend this presentation. This webinar will qualify for CLE and CPE credit.

Date: Wednesday, September 23, 2015 | 12:30 PM or 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email agassman@gassmanpa.com.

**************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and Lee-Ford Tritt will present a webinar on the topic of WHETHER TO MARRY AND WHAT TO CONSIDER: A TAX AND ESTATE PLANNER’S GUIDE TO COUNSELING SAME-SEX COUPLES WHO MAY TIE THE KNOT for Bloomberg BNA.

Date: Wednesday, September 30, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com.

*************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

****************************************************

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Christopher Denicolo will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)

LIVE ORLANDO PRESENTATION:

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING

Date: January 11 – January 15, 2016 

Location: To be announced 

Additional Information: Information on the 50th Annual Heckerling Institute on Estate Planning will be available on August 1, 2015. To learn about past Heckerling programs, please visit http://www.law.miami.edu/heckerling/.

*******************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins, which is not affiliated with Anthony Hopkins.

Please provide us with your input for other topics for this year and next! Watch this space for more speaker and topic announcements.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

July Applicable Rates

The Thursday Report – 7.2.15 – Hot Tub Justice & Time Travel

Posted on: July 2nd, 2015

Last Week’s Thursday Report

Ten Questions to Ask About a Client’s Life Insurance and Planning Sneak Peek

Office of Inspector General Fraud Alerts: An Interview with Lester Perling, Part 2

Tax Documents: What to Shred & What to Keep

Richard Connolly’s World – Setting Up for Post-Law School Success

Thoughtful Corner – The Project Manager

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Last Week’s Thursday Report

Last week, the Thursday Report was not ready, so we instead published the report intended for this week. In the middle of that, the US Supreme Court declared that states must recognize same-sex marriages and that a central part of Obamacare is not unconstitutional.

Therefore, a significant portion of our population can now marry their significant other and qualify for Obamacare all at the same time, except that the wedding ceremonies will presumably not be performed by Justice Roberts, Justice Scalia, Justice Thomas, or Justice Alito, who are stuck in the past and pictured below in a hot tub time machine.

Our primary concern with these new decisions was how we would incorporate them into what should have been last week’s Thursday Report. It occurred to us that any deadline can be moved back by simply moving it forward and that deadlines can be swapped in 1032 tax-free deadline-swapping exchanges, as long as there is a legitimate business purpose and the intent of the swap is not to avoid federal income taxes or to replace your significant other.

Given that Thursday, July 2 will be last week when seen from next week, we bring you last week’s Thursday Report but with a special flair (gun.)

A flare gun shoots only a display ordinance that is intended to attract the attention of those in the general vicinity to please find and save the person who shot the flare gun. Flare guns cost anywhere between $50 and $250, do not require a permit to own, and can be purchased at Walmart.

Flare guns can be very dangerous because they basically fire a phosphor-propelled rocket tube. The main ingredients in a flare are black powder (used to launch the flare) and magnesium, which produces the light. Magnesium burns at around 5,010 degrees Fahrenheit, making it impossible to put out with water or a small fire extinguisher. One misfire from a flare gun into a flammable area could cause catastrophic, fiery consequences.

A basic flare gun does not shoot a flare with enough force to penetrate the human body. If a person were shot with a flare gun, the flare would likely bounce off of them and continue flying until it ran out or caught something on fire. There is always the chance the flare will burn skin or catch a person’s clothing on fire, however. While a flare gun is not inherently deadly, if a flare hit a person in the face or neck, it could cause severe injury or in rare instances, death.

As far as we know, the last person killed by a flare gun was John David Cook, Jr., of Baytown, Texas. He died on Christmas Day 2013 from an accident resulting in severe burns to his hands and an open wound in his chest that proved to be fatal. Mr. Cook was attempting to create a bigger bang by way of combining fireworks with his flare gun. The explosion from the fireworks and flare caused the modified flare launcher he was attempting to build to become impaled in his chest. Although accidents like this are few and far between, it goes to show that flares and flare guns are to be treated with the utmost caution and safety.

In the much-lauded and critically-acclaimed (by Colonel Sanders) American “feuture” films Hot Tub Time Machine and Hot Tub Time Machine 2, four friends find themselves in a malfunctioning hot tub that turns out to be a time machine, which takes them back in time and propels them into the future, where they find that flare guns won’t work once immersed in a hot tub.

They suddenly realize that by reading a Thursday Report upside down and in a mirror, they’ll find themselves in the same predicament but one week earlier or later, depending on when they do this.

We would all like to travel in time, and we actually do, but apparently at a pre-set speed that is slower than what we would like it to be for certain events and much faster for others.

Your free subscription to the Thursday Report entitles you to move deadlines back and forth, as mentioned in the court case of Perez & Perez, M.D., P.A. v. Holder, 867 So. 2d 622 (Fla. 2d Dist. App. 2004), which you cannot view by clicking here.

Ten Questions to Ask About a Client’s Life Insurance
and Planning Sneak Peek

by Alan Gassman, Barry Flagg, and Alyssa Perez

In September, Alan Gassman will be participating in a panel discussion of life insurance products and the math associated therewith at the Notre Dame Tax Institute in Bloomberg, Indiana on Thursday, September 17, and Friday, September 18, 2015. A complimentary late Wednesday afternoon, two-hour session on The Estate Planner’s Guide to ESPOs (Employee Stock Ownership Plans) will also be available to attendees.

In preparation for this event, Alan and Barry Flagg have prepared an article for the September issue of the Bloomberg BNA estate and gift tax journal entitled “Ten Questions to Ask About a Client’s Life Insurance and Planning: What Every Estate Planning or Tax Planning Advisor Should Know.”

We will publish this article in its entirety in fall issues of the Thursday Report. For a sneak preview of the article, please email agassman@gassmanpa.com.

Office of Inspector General Fraud Alerts:
An Interview with Lester Perling, Part 2

Lester

On June 9, 2015, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services issued a fraud alert, which can be viewed by clicking here.

Alan Gassman interviewed Lester Perling of Broad & Cassel about the OIG Fraud Alert, part 1 of which can be viewed by clicking here. The conclusion of our interview is printed below:

Alan – Now, Lester, some of the people reading this might not really be aware of what the Office of Inspector General is or what the criminal aspect of this type of situation is. Can you give a little bit of background on that, and maybe update those of us who do know what it is?

Lester – Sure, Alan. Essentially, when there is a financial arrangement between a provider, like a home health agency or imaging center or whomever, and a physician and their spouse, it implicates a number of federal statutes since we are talking about the federal level right now. One is the federal anti-kickback statute which prohibits remuneration in exchange for referrals. It’s pretty straightforward.

A home health agency employing a doctor’s spouse to do nothing is going to be considered an attempt to induce the referrals of that doctor. It implicates the Stark Law, which is the federal prohibition against referrals, if the physician does not have a relationship that falls into an exception. Again, these relationships, while they were structured to look like they fit into an exception, because again, some of these spouses really weren’t doing any work, they really didn’t fit into an exception.

Alan – So where does the OIG come in?

Lester – The kickback statute is a criminal statute, but in addition to criminal penalties, there is the False Claims Act, and this is where the OIG comes in. The OIG has the authority to impose administrative sanctions against physicians and providers that violate the federal anti-kickback statute, even if they are not being prosecuted criminally. Those sanctions include either civil money penalties and/or exclusion from participating in federal health care programs.

Alan – How do the administrative sanctions differ from criminal cases?

Lester – It is a lot easier for the OIG to impose an administrative sanction than it is a criminal case because there is not a jury trial, and you don’t have the same level of proof. The criminal standard, of course, is reasonable doubt. The administrative level of proof is simply the preponderance of the evidence. So it is a much easier case to make because you do not have to prove it beyond a reasonable doubt like you do in a criminal case. There is no jury to convince. The hearing that the provider gets, if they go to that stage, is in front of an administrative bar judge, and he tends to be friendly to the government, so that is one reason the OIG pursues cases like the one described in the Fraud Alert.

So the OIG has the authority to impose sanctions against providers for kickbacks, for false claims submissions, or for any number of bad acts, but in terms of these types of relationships, it’s related to kickbacks. The submission of the claim is predicated upon a kickback, so theoretically, every claim the home health agency submitted that was a result of the referral of one of these doctors could also be considered a false claim under the US False Claims Act, as the law now stands, in addition to the extent that the Stark Law was violated, and that also forms the basis for the False Claims Liability Act.

The government has a lot of arrows in its quiver, but this one, the administrative sanctions, is probably the easiest for them to use in terms of both proof and the process they have to go through to get a sanction imposed. It is a much simpler and cheaper and more streamlined process for them, but it nonetheless sends the message and can get what they consider to be bad apples either out of the program through an exclusion, or it can get them in line and set examples for others who might consider these types of relationships. Hence the Fraud Alert – it alerts doctors of what they are in for if they don’t pay attention to these financial arrangements.

Alan – What about situations where there is no federal money involved, but there is state money involved?

Lester – Well, there are similar state laws, although they don’t involve the OIG if there is truly no federal money involved. One thing I would like to caution about here: we see a lot of times, people will structure an arrangement where the physician may be getting compensated for something that doesn’t involve federal patients, but it is a referral relationship between that physician and the provider, whether a physician refers Medicare or other federally funded patients.

So let’s say the physician is being paid by the provider, by a home health agency, to only review private patient records, and it is a dummy relationship; they’re not really doing anything. The contract reports to exclude any federal patients. The federal government would say in response to that, “Uh-uh, you have a financial relationship with this doctor. If he is referring federal patients, your arrangement clearly is intended to induce those referrals even though you are not paying him to work on federal business.” So that is going to be a distinction without a difference, as far as the Feds are concerned, if they believe there is a violation of the kickback statute or the Stark Law. It’s just not going to matter. The fact that a relationship purports to be private only stands if the physician is also either referring or in a position to refer federal business. Federal laws are still very much implicated, and the government certainly is concerned and becoming more concerned about those arrangements.

Alan – But what about if there really is no federal business?

Lester – To the extent that there really is no federal business – let’s say the provider is a home health agency that is not a Medicare provider and doesn’t bill any other federal program – then the federal laws don’t really apply. The OIG is out of the picture, as is the US Attorney’s office, and you would be dealing now with state law.

So with state law, you are talking about the Patient Brokering Act which is a state criminal statute, and you are talking about discipline under licensure statutes, whether it is the Board of Medicine for Physicians, the Agency for Health Care Administration for Home Health Agency, or Heath Care Clinic. There really isn’t a provision for administrative sanctions, although, if it involves Medicaid, which is a federal payer, there are administrative sanctions, but then the Feds would potentially be back in the picture.

With really strictly private relationship – private patients, the reality is the risks are lower because either the state brings criminal action against the participants under the Florida Patient Brokering Act or administrative sanction penalties through a licensure statute. Frankly, the state has not been good at pushing kickback and fee-splitting cases in this context, but it doesn’t mean they can’t in the right situation. It’s a very different playing field.

Alan – So what kind of arrangements come to mind besides what we saw here in this OIG opinion? What sort of arrangements come to mind that you are seeing doctors commonly engage in that just causes you some angst?

Lester – There are marketing arrangements. There are obviously medical director arrangements, leasing arrangements, equipment/space rental arrangements, being paid to serve as a medical advisor, being paid to be on a Board of Directors…there are all matters and forms of financial arrangements that providers and physicians can enter into, any of which can be perfectly legitimate under the right circumstances. It’s hard to say that any arrangement is necessarily illegal, per se. Each one really has to be evaluated based on what is going on in that particular arrangement. Does it fit within a Stark Law exception? Does it fit within a safe harbor to federal anti-kickback statutes, which are regulations that define arrangements not subject to sanctions if the elements of a safe harbor are all met, and even if they are all met, there could still be problems if the intent is to induce referrals, at least theoretically.

Even a marketing arrangement is not illegal if done correctly. Other than a straight kickback, which, obviously, a payment for a referral is illegal, relationships between providers and physicians are not illegal. It is a matter of how they are structured. Are they for legitimate services? Is the payment fair market value? Does it vary with referrals? There are various things to look at.

There is nothing that is per se illegal other than a straight kickback. Other than that, the relationship just has to be evaluated based on both what is on the surface and what is just below it, if you scratch a little bit.

Alan – Okay. Alright, very good. Is there anything else you wanted to say? I think you covered it very well, and I think it is very important to get the word out to physicians that they need to be careful. Things they may have been able to do for years on end might not really be as safe as they thought.

Lester – Yeah, you know, I encourage any physician who is thinking of entering into this type of arrangement, or any provider who is thinking of entering into one with a physician, to spend a few bucks up front and get a competent attorney to look at it and advise them about the risks in that particular arrangement from their perspective, not with an eye to making an illegal arrangement look legal, but whether or not it really is legal and the risks associated with it.

I’m often asked, “If this is no good, can you make it okay?” I won’t go to jail for a client so I generally say no in that context, unless they are really trying to form a legitimate and lawful arrangement, and that takes some judgment on the attorney’s part. It really behooves providers and physicians to do a little preventive medicine as it were.

Alan – Perfect. Lester, I can’t thank you enough for joining me for this interview. Please email any questions you might have to Lester at lperling@broadandcassel.com. Send Lester the difficult questions. Easy ones can be sent to me at agassman@gassmanpa.com. Thanks again, Lester.

Tax Documents: What to Shred & What to Keep

The New York Times recently ran an excellent article outlining which important documents should be saved and for how long, which important documents can be tossed, how to properly store the paper and electronic documents you should keep, and how to properly dispose of the documents you don’t need.

Click here to see the article in its entirety, or read on for the highlights below.

Documents to Keep Indefinitely:

  • Birth certificates
  • Social Security cards
  • Wills
  • Life insurance policies
  • Divorce decrees

Documents to Keep for at least 3 Years:

  • Federal tax returns
  • W-2 Forms
  • Utility bills, if they support a home-office tax deduction
  • Supporting federal tax documentation

Documents to Dispose of:

  • Hard copies of bank statements
  • ATM receipts

When financial documents are disposed of, do not simply toss them into a trash bin. Shred any documents containing account numbers, Social Security numbers, or dates of birth by using either an at-home cross-shredder or by utilizing a commercial shredding service. Shredding these documents will reduce the risk of identity theft.

Additionally, crucial documents that need to be kept indefinitely should be stored in a dry, safe place, such as a fireproof lock box or a safety deposit box at a bank.

Richard Connolly’s World
Setting Up for Post-Law School Success

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with links to the articles.

This week, the first article of interest is “Why a Top Law Firm Teaches its Lawyers to be More Like MBAs” by Natalie Kitroeff. This article was featured on the Bloomberg Business website on June 16, 2015.

Richard’s description is as follows:

Turning law students into lawyers has traditionally been the job of law schools. One major New York firm has decided three years of traditional legal training is not enough to make its rookies practice-ready.

At Skadden Arps, one of the country’s largest law firms, new hires must undergo five weeks of intensive business training, which they refer to as a mini-“virtual MBA.” The approach is part of a growing push within the legal industry to equip lawyers with a deep understanding of finance and accounting at the start of their careers.

Please click here to read this article in its entirety.

The second article of interest this week is entitled “Trusts and Estates Practices: Engines of Growth” by Russ Alan Prince. It was featured on Forbes.com on June 24, 2015.

Richard’s description is as follows:

In today’s environment, a well-managed and proactive trusts and estates practice can be a very financially rewarding specialization. This is the case for the largest law firms as well as law firms with only a few partners.

While the demand for the expertise of trusts and estates attorneys is increasing, so too are the competitive pressures. Nevertheless, those trusts and estates attorneys who are motivated to excel and who effectively implement critical business development strategies are inclined to build substantial practices benefitting their clients and themselves.

Please click here to read this article in its entirety.

Thoughtful Corner
The Project Manager

Business and professional life is a series of projects, tasks, and associated activities and reminders. Typically, the professional who the client sees as the Primary Handler is the “Project Manager,” although this is not always the highest and best use for that professional’s time and abilities. Even clients and customers will understand that many aspects of a given project are better managed and shepherded by someone other than the key professional.

Tasks that include check-listing, sending reminders, making necessary phone calls, and other similar to-dos will often be forgotten or left for later (often too late), so why not appoint a Project Manager to efficiently and effectively manage a given task and also provide an important backstop to make sure that appropriate steps and actions are taken at appropriate times to best handle any given objective?

Our reptile brain impulses of the need to control, the need for recognition, and basic insecurities will often prevent us from effectively and efficiently delegating the management of a task to someone else who can do a better and more thorough job of it, not to mention being a less expensive labor source than the primary professionals often are. Some professionals appoint a separate, independent Project Manager for every client matter, while others will only use a Project Manager occasionally, often for the largest or most involved clients or accounts.

Many people and organizations do this informally, but formalizing the arrangement and giving credit and responsibility where it is due and will be recognized will often be helpful.

Once you appoint someone other than yourself as the Project Manager, you may find responsibilities and functions, like billing, follow-up, client/customer satisfaction questionnaires, and value/revenue added services to be additional parts of an enhanced productivity and profitability equation.

Responsibilities of our Project Managers include:

  1. Attend a “debriefing” after the attorney meets or has a conference call with the client to understand exactly what we will be doing for the client.
  2. Complete and update the below Project Manager checklist.
  3. Update PC Law to include their initials in the Matter Manager, so everyone who works on that client will know who the Project Manager is.
  4. Review chart updates done by other staff members for the duration of the project.
  5. Review draft bills for the duration of the project.
  6. Write letters for the attorney as needed.
  7. Make sure components of the project are finalized and sent to the client in a timely manner.
  8. Make sure bills are finalized and sent out in a timely manner.
  9. Handle follow-up as needed.
  10. Delegate as needed and show who is responsible for what on the Project Manager checklist.
  11. Keep a clipboard with a Project Manager checklist for each active client or project. Always bring the clipboard when meeting with the attorney.

To see a form that we have used to implement Project Managers in our office can be viewed by clicking here.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

Upcoming Seminars and Webinars

New Announcements

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and a guest to be determined will present WHAT TAX PLANNERS NEED TO KNOW ABOUT NORTH DAKOTA TRUST LAW for Bloomberg BNA.

Date: Wednesday, September 9, 2015 | Time TBA

Location: Online webinar

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com

*******************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and Lee-Ford Tritt will present a webinar on the topic of WHETHER TO MARRY AND WHAT TO CONSIDER: A TAX AND ESTATE PLANNER’S GUIDE TO COUNSELING SAME-SEX COUPLES WHO MAY TIE THE KNOT for Bloomberg BNA.

Date: Wednesday, September 30, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com.

Calendar of Events

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on FINANCIAL RELATIONSHIPS WITH PATIENTS, CO-PAYMENTS, GIFTS, AND GRAFT – HOW TO STAY OUT OF TROUBLE UNDER FLORIDA AND FEDERAL LAW.

This is an essential guide for medical practices and those who advise them. There will be two opportunities to attend this presentation.

Date: Tuesday, July 7, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email Alan Gassman at agassman@gassmanpa.com.

***********************************************

LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR:

Alan Gassman will present a webinar on the topic of WHAT FLORIDA CPAS NEED TO KNOW ABOUT ASSET PROTECTION for the Florida Institute of CPAs.

More information about this webinar will be forthcoming. Please stay tuned!

Date: Thursday, July 9, 2015 | 9:30 AM – 10:30 AM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com. To register, please contact Thelma Givens at givenst@ficpa.org.

**************************************************

LIVE CLE TELECONFERENCE PRESENTATION:

Alan Gassman will serve as a speaker and panelist for an ABA Probate, Estate Planning and Trust section CLE teleconference on the topic of COMPARING AND CONTRASTING VARIOUS METHODS TO ACHIEVE A STEP-UP BASIS ON A MARRIED COUPLE’S APPRECIATED ASSETS AT FIRST DEATH IN NON-COMMUNITY PROPERTY STATES.

Attorney David Slenn with Quarles Brady will moderate the conference. Other panelists include Edwin Morrow, III.

Date: Tuesday, July 21, 2015 | 1:00 PM – 2:30 PM

Location: Teleconference

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Edwin Morrow at edwin_p_morrow@keybank.com.

******************************************************

LIVE ORLANDO PRESENTATION:

ORLANDO BUSINESS AND PROFESSIONAL PRACTICE OWNER SYMPOSIUM

Alan S. Gassman, business coach and author David Finkel, and others will present a two-day conference for high-net-worth business and professional practice owners sponsored by Maui Mastermind®.

Alan’s topics will include BASIC AND ADVANCED PLANNING TECHNIQUES FOR THE PROTECTION OF WEALTH, THE 10 BIGGEST MISTAKES THAT BUSINESS OWNERS AND PROFESSIONALS MAKE, and ESTATE TAX AVOIDANCE TECHNIQUES FOR BUSINESS OWNERS AND PROFESSIONALS.

Other topics include A Proven Map to Grow Your Business and Get Your Life Back, Building Wealth Outside of Your Company, Tax Reduction Strategies, and Understanding How Investments Work and What They Cost.

Date: July 30th and 31st, 2015

Location: Hyatt Regency Orlando | 9801 International Drive, Orlando, FL 32819

Additional Information: Interested individuals can contact agassman@gassmanpa.com or David Finkel at david@mauimastermind.com.

********************************************

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

I was fortunate to attend the Law Practice and Professional Development Workshop conducted by Alan Gassman, Esq. in Clearwater, Florida on August 3, 2014.  The Workshop covered a wide range of topics from Goal Setting and Gratitude to as practical a topic as law office logistics.  Alan’s approach was intimate, self-revelatory and highly instructive.  I have been practicing law for 20 years and have never attended a program as broad ranging, practical and encouraging.  The depth of Alan’s thought and experience is obvious in the materials and in the ease with which he led the discussions.  This was not a dull lecture but a highly engaging workshop that was over before you expected it to be.

Daniel Medina, B.C.S
Board Certified in Wills, Trusts and Estates
Medina Law Group, P.A.

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

****************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on the topic of EVERYTHING YOU ALWAYS WANTED TO KNOW ABOUT CREDITOR PROTECTION AND DIDN’T EVEN THINK TO ASK.

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and a guest to be determined will present WHAT TAX PLANNERS NEED TO KNOW ABOUT NORTH DAKOTA TRUST LAW for Bloomberg BNA.

Date: Wednesday, September 9, 2015 | Time TBA

Location: Online webinar

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanp.com

*******************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

*****************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

*************************************************

LIVE WEBINAR:

Alan Gassman, Christopher Denicolo, and Kenneth Crotty will present a 50-minute webinar entitled CREATIVE PLANNING FOR FLORIDA REAL ESTATE with a guest (victim) to be determined. This presentation will be free and worth every dollar!

There will be two opportunities to attend this presentation. This webinar will qualify for CLE and CPE credit.

Date: Wednesday, September 23, 2015 | 12:30 PM or 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email agassman@gassmanpa.com.

**************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and Lee-Ford Tritt will present a webinar on the topic of WHETHER TO MARRY AND WHAT TO CONSIDER: A TAX AND ESTATE PLANNER’S GUIDE TO COUNSELING SAME-SEX COUPLES WHO MAY TIE THE KNOT for Bloomberg BNA.

Date: Wednesday, September 30, 2015 | 12:00 PM – 1:00 PM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com.

*************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

****************************************************

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Christopher Denicolo will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)

LIVE ORLANDO PRESENTATION:

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING

Date: January 11 – January 15, 2016

Location: To be announced

Additional Information: Information on the 50th Annual Heckerling Institute on Estate Planning will be available on August 1, 2015. To learn about past Heckerling programs, please visit http://www.law.miami.edu/heckerling/.

*******************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins, which is not affiliated with Anthony Hopkins.

Please provide us with your input for other topics for this year and next! Watch this space for more speaker and topic announcements.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

July Applicable Rates

The Thursday Report – 6.25.15 – Next Week’s Thursday Report

Posted on: June 25th, 2015

Next Week’s Thursday Report

The Biel Reo Bank Case Denied Certiorari by Florida Supreme Court

Office of Inspector General Fraud Alerts: An Interview with Lester Perling, Part 1

Excerpts from Creative Tax Planning for Real Estate Transactions and Investors

Richard Connolly’s World – Settling an Estate After Death

Thoughtful Corner – 5 Steps to Relieve Procrastination – How to Begin (and End!) a Project Successfully

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Next Week’s Thursday Report

The editors regret to inform the readers that this week’s Thursday Report was not ready on time. We have therefore provided you with next week’s Thursday Report. This week’s Thursday Report will hopefully be ready by next week. If not, the Thursday Report from the following week will be provided.

As the result of the above, any amortization tables based upon the issuance of Thursday Reports will need to be changed because interest that would have accrued this week will instead accrue next week, and thus, the interest that accrues next week will not include interest on the interest that would have accrued last week. We would therefore suggest that amortization tables no longer be based upon the relative edition and timing of The Thursday Report unless you are paid by the hour to change them.

Therefore, if you feed your fish weekly based upon the edition of The Thursday Report, please give the fish next week’s food this week and this week’s food next week. If confused, the fish can explain.

New Webinar News

On September 9, 2015, Alan Gassman and a guest to be named will present a webinar entitled “What Tax Planners Need to Know About North Dakota Trust Law” for Bloomberg BNA.

On September 23, 2015, Christopher Denicolo, Alan Gassman, and Kenneth Crotty will present Creative Planning for Florida Real Estate with a guest (victim) to be determined. This will be free and worth every dollar!

For more of our upcoming presentations, please see our Seminars and Webinars section below.

The Biel Reo Bank Case Denied Certiorari by Florida Supreme Court
by Ken Crotty and Alan Gassman

Just in time, a bankruptcy court decision confirms that the extended statute of limitation on fraudulent transfer pursuits will not apply if the debtor files for bankruptcy.

In the 2014 First District Court of Appeals case of Biel Reo, LLC v. Barefoot Cottages Develop., it was concluded that the four year statute of limitations on fraudulent transfers will not apply in a proceedings supplementary.[1] The crux of the court’s decision rested on the fact that a proceedings supplementary is not an independent cause of action and instead is “collateral to the main action at law” and serves as a means to enforce a pre-existing judgment. The court held that, despite the fact that “proving and defending fraudulent transfer claims brought under §56.29 borrow substantively from the Uniform Fraudulent Transfer Act (UFTA), this does not require the adoption of the UFTA’s much shorter limitations period. This is mainly because §56.29’s contrary scheme and precedent broadly establishes the availability of proceedings supplementary for the life of the judgment, when a valid, unsatisfied execution exists.”[2]

Under §56.29, a judgment creditor may: (1) pursue assets held by the debtor; (2) pursue assets held by another, so long as the property is not exempt from execution; or (3) void any transfers to a spouse or third party that was made for purposes of delaying, hindering, or defrauding a creditor.[3] Since §56.29 is a procedural statute, claims brought under this section must be analyzed according to other substantive law since the statute borrows substantively from the UFTA.[4]

On May 12, 2015, in the Bankruptcy Court order of In re C.D. Jones & Company, Inc., Bankruptcy Judge Karen K. Specie came to the conclusion that Florida’s proceedings supplementary statute[5] would not apply to extend the statute of limitations upon setting aside fraudulent transfers in bankruptcy.[6] In the Order Denying Motion to Remand or to Abstain from Hearing Removed Matter, Judge Specie opined as follows:

The Daakes argue that the Bankruptcy Court is not the proper place for the Removed Proceeding because the causes of action do not arise in a case under Title 11; they only involve Florida law causes of action. Without question, the Removed Proceeding is styled as a proceeding supplementary to execution, under Fla. Stat. §56.29. Had C.D. Jones not filed bankruptcy, the Daakes, as judgment creditors, would have the right to pursue proceedings supplementary as long as their judgment remained valid and outstanding. But C.D. Jones did file bankruptcy and remains a Chapter 7 debtor before this Court. This Court has previously ruled that “the claims and causes of actions asserted…constitute property of the bankruptcy estate and any recover from them shall inure to the benefit of all creditors.” This ruling, and these facts, bring the Removed Proceedings squarely within this Court’s jurisdiction.

Further, footnote 18 of the Order states that:

In their memorandum, the Daakes assert that their right to avoid fraudulent transfers in the Proceedings Supplementary extends for the life of the Judgment (20 years) under Florida law, citing Biel Reo, LLC vs. Barefoot Cottages Dev. Co., LLC So.3d 506 (Fla. DCA 2014), reh’g denied (Feb. 3, 2015). While this may be true in general, it is not true when the judgment debtor files bankruptcy. Nothing in the Biel Reo, LLC opinion states otherwise.

Judge Specie further relied on the Bankruptcy case In re Fundamental Long Term Care, Inc. in determining whether jurisdiction over the supplementary proceedings is valid.[7] In Fundamental Long Term Care, the bankruptcy court held that it could, in fact, “exercise related to” jurisdiction over a judgment creditor’s supplementary proceedings in state court.”[8] In this case, a judgment creditor was attempting to recover a large sum of assets, which were owned by the debtor’s “wholly owned subsidiary,” based on fraudulent transfer and alter ego claims.[9] Regarding the validity of the jurisdiction over the proceedings, the court held:

A dispute is “related to” a case under title 11 when its result “could conceivably” have an “effect on the estate being administered in bankruptcy.” The “proceeding need not necessarily be against the debtor or against the debtor’s property,” if it could affect the administration of the bankruptcy estate. “The key word in the Lemco Gypsum/Pacor test is ‘conceivable,’ which makes the jurisdictional grant extremely broad.” As the Supreme Court recognized in Celotex Corp., “Congress intended to grant comprehensive jurisdiction to the bankruptcy courts so that they might deal efficiently and expeditiously with all matters connected with the bankruptcy estate.[10]

We understand that this decision is now being appealed. The parties have already been in litigation for over ten years.

As a result of the above, debtors who might find themselves in a proceedings supplementary more than four years after having made a transfer that might have been considered to have been “fraudulent” and need to be able to go into bankruptcy should refrain from making transfers that could be considered fraudulent for the period preceding 1 year before they would file bankruptcy.

We will be writing on these cases and associated topics with some very bright co-authors, so please stay tuned!

**************************************
[1] So.3d 506 (Fla. DCA 2014).
[2] Biel Reo, LLC at 4.
[3] Fla. Stat. §56.29.
[4] Mejia v. Ruiz, 985 So. 2d 1109, 1112-13 (Fla. Dist. Ct. App. 2008); Nationsbank, N.A. v. Coastal Utilities, Inc., 814 So. 2d 1227, 1229 (Fla. Dist. Ct. App. 2002); Morton v. Cord Realty, Inc., 677 So. 2d 1322, 1324 (Fla. 4th DCA 1996).
[5] Fla. Stat. §56.29
[6] 2015 WL 2260707 (Bankr. N.D. Fla., May 12, 2015).
[7] In re Fundamental Long Term Care, Inc., 501 B.R. 770 (Bankr. M.D. Fla. 2013).
[8] Id. At 778.
[9] Id.
[10] Id. at 777.

Office of Inspector General Fraud Alerts
An Interview with Lester Perling, Part 1

Lester

On June 9, 2015, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services issued a fraud alert, which can be viewed by clicking here.

Alan Gassman interviewed Lester Perling of Broad & Cassel about the OIG Fraud Alert, part 1 of which is printed below:

Alan – Today, we are going to talk about the OIG’s warning shot about physician compensation and medical directorships. Lester, welcome.

Lester – Thank you, Alan.

Alan – June 9, 2015, the Fraud Alert. Physician compensation arrangements may result in significant liability. Lester, what is this, and what do we learn from it?

Lester – Well, Alan, this flows from a case in which we actually represented one of the doctors who got in trouble – one of the twelve physicians and his wife. This was a home health aide. This particular case has generated this Fraud Alert.

Fraud Alerts, by the way, for those that don’t know, are a fairly rare thing for the OIG to issue. They haven’t issued one in quite some time. They might issue one every two to three years when they have a topic that they are particularly concerned about and they want to send a message. So this is a message to the physician community about natural arrangements between them and entities to which they refer. This was a case of a home health agency who had multiple medical directors, which probably, for a time, was more common than it is now. The agency also hired several physicians’ spouses to work for it, which has also been a common thing with home health agencies and other types of providers.

So this particular home health agency hired the physicians’ spouses to do various tasks like marketing, even nursing. Some of the spouses were actually nurses and did clinical work in the field. Some of the spouses did nothing but were still paid. Others did, in fact, provide services for a period of time. The facts of this case really probably aren’t the most important thing. What is really important about this Fraud Alert and what the OIG has been talking about in the recent weeks and months is the fact that they are going to start looking more at not just the entity involved in physician arrangements in terms of sanctioning them but at the physicians as well.

This is kind of going full circle. Alan, you may remember the old Clearwater lab case…

Alan – I knew it well, but can you tell us about it?

Lester – The OIG went after physicians who were involved with this laboratory, which they believed was paying kickbacks and doing other improper things, and that caused a major uproar in the physician community in the Tampa Bay area. In fact, it led to a meeting between OIG officials and the U.S. Attorney’s office and the community physicians and their representatives about the heat that physicians were taking as a result of that.

That actually, I think, caused the OIG, and to some degree, the Department of Justice, to pull back from going after individual physicians and focus more on the entities that were entering into these unnatural arrangements with them. I think that the OIG, at least, believes now that was probably a mistake, or they believe they went too far the other way.

The pendulum is now swinging back, and this case kind of represents that fact. There was nothing unusual about this case. It is one of many where there are physicians or physician spouses getting remuneration. What this signals is, like I said, a swing of the pendulum back to the OIG, who is now not going to just focus on the entity. They’ll certainly go after the entity, but they are also going to go after the physicians or their spouses who are involved in these relationships and seek to sanction them as well.

Alan – So they published the Fraud Alert as a warning to these physicians?

Lester – They published a Fraud Alert to make sure that physicians are aware that they are vulnerable. I think the physicians believe that, with the way it has been with not going after the physicians, the physicians say, and I hear this from clients, they say, “Well, what is the real risk? What’s going to happen to me?” Until recently, the answer was that there may not be much that happens to the individual physician because the OIG tends to focus on the entity. Now, the OIG is saying that is changing, and that is what is really important about this Fraud Alert.

Alan – What happened to some of the physicians involved in this case?

Lester – They all settled. They all got to pay the government various sums of money. Some were considered more culpable than others. Some, like I said, the spouses did nothing, no work at all, for their pay. Others, in fact, did work, but they all ended up settling because most of the physicians and their spouses really had no good defense. Even the lowest settlement was in the low six figures.

It was expensive. There were significant settlements. I do not believe any of them had been excluded because all of the settlements prevented exclusion. Basically, they were preventing the exclusion by settling, but like I said, some had no really good defense prepared, so it was an expensive proposition for them, obviously.

Alan – That’s very gentle compared to the Clearwater Clinical Lab experience, where several doctors were arrested in their own lobbies and then had to get bail.

Lester – Yes, the pendulum hasn’t swung back that far yet. I think other than those that are just committing outright fraud, it’s going to be this type of administrative sanction, which is probably what they should have done with the Clearwater Clinical Lab doctors, and that’s why they think they went too far the other way, where they weren’t doing enough with physicians, in terms of at least doing some sort of administrative sanction.

Alan – What kind of consequences can an administrative sanction have on a physician?

Lester – Keep in mind that this type of action on the part of the government can have licensure collateral consequences. It can lead to disciplinary investigations by the Board of Medicine. It can have collateral consequences for Managed Care Agreements and participation in networks. It’s not criminal, but it is very serious business.

Stay tuned for next week’s Thursday Report, where Lester will discuss the background of the Office of Inspector General and the case that led to the newest Fraud Alert, as well as the differences between federal and state violations.

Excerpts from Creative Tax Planning for
Real Estate Transactions and Investors

Alan Gassman, Christopher Denicolo, Jerry Hesch, and Stephen Breitstone presented a webinar entitled “Creative Tax Planning for Real Estate Transactions and Investors: A Practical Guide for Real Estate and Tax Advisors and Their Clients” on Tuesday, June 23, 2015. Some excerpts from this webinar are as follows:

Real Estate is Generally a Capital Asset, with an Important Exception

Real estate is generally treated as a capital asset for most taxpayers; however, there are certain exceptions. One important exception is real estate that is treated as inventory in hands of the taxpayer (i.e. the taxpayer is a “dealer”), which causes any gain or loss from the sale of exchange of real estate to be treated as ordinary income. Dealers in real estate are also precluded from taking advantage of certain tax deferral techniques, such as Section 1031 like-kind exchanges and Section 453 installment sales.

Courts have looked at the following factors in determining whether to classify a taxpayer as a dealer:

  1. Number, frequency, and continuity of sales;
  2. Nature and extent of improvements and/or development activities;
  3. Purpose and reason for which the property is held;
  4. Sales activities and efforts with respect to the property;
  5. The relationship of the property to the taxpayer’s business and the taxpayer’s statements concerning its business;
  6. Duration of ownership, and
  7. Whether the taxpayer purchased replacement property or has demonstrated a pattern of continuous buying and selling of real property.

Advantages to a client being a dealer include ordinary loss treatment if a loss occurs on sale and being able to take advantage of the real estate professional exception to the 1411 Tax. Disadvantages to a client being a dealer include earning ordinary income in lieu of capital gains on sale.

Passive Loss Rules Regarding Rental Activities

Losses from passive activities cannot be offset against income from non-passive activities and can only be used to offset income from passive sources. The passive loss rules are provided under Section 469. Any losses from real estate rental activities are generally treated as passive per se (i.e. without regard to whether they involve the conduct of a trade or business or whether the taxpayer has materially participated.)

There are a number of limited exceptions for certain situations where the rental activities involve short rental periods, extraordinary personal services, rentals to joint ventures, or pass-through entities in which the taxpayer has an interest. If the taxpayer is a real estate professional who meets certain criteria, then any losses from real estate rental activities are not passive per se.

The regulations prescribe a complex and fact-intensive set of tests that a taxpayer can satisfy to cause real estate rental activities to be treated as non-passive.

The Real Estate Professional Exception

To qualify for the real estate professional exception to the passive loss rules, the taxpayer must:

  1. Provide more than ½ of his or her total personal services in real property trades in which he or she materially participates, and
  2. Perform more than 750 hours of services during the tax year in real property trades or businesses in which he or she materially participates.

What is Material Participation?

Temporary Treasury Regulation Section 1.469-5T(a) lists the seven tests that an individual can satisfy to establish material participation:

  1. The individual participates in the activity for at least 500 hours during the applicable tax year;
  2. The individual’s participation in the activity constitutes substantially all of the participation in the activity of all individuals during the taxable year;
  3. The individual participates in the activity for more than 100 hours during the tax year, and his or her participation is not less than that of any other individual during the same year;
  4. The activity is a “significant participation activity” of the individual, and the individual participates in all significant participation activities for more than 500 hours in the applicable tax year;
  5. The individual materially participated in the activity for any 5 of the 10 taxable years that immediately precede the current taxable year;
  6. The individual materially participated in a personal service activity for any three prior taxable years, or
  7. The individual has regular, continuous, and substantial involvement in the activity, based on all of the facts and circumstances.

Where is Material Participation Determined?

For partnerships and S corporations, material participation is determined at the individual partner level. For non-grantor trusts, material participation is determined based upon the trustee’s activities and not upon a beneficiary’s activities.

Under the Frank Aragona Trust v. Commissioner case (142 T.C. No. 9; 2014), the Tax Court ruled that a trust can qualify for the real estate professional exception to the passive loss rules if the trustees are individuals and the individuals otherwise satisfy the material participation tests. In Frank Aragona Trust, three of the six individual co-trustees were full-time employees of the LLC that operated real properties.

This case is also important in the context of the 3.8% Net Investment Income Tax under Section 1411. Under Section 1411, “Net Investment Income” includes income from sources that are passive with respect to the taxpayer and the determination of whether income is passive is based on the passive loss rules of Section 469.

Non-grantor trusts are subject to the 3.8% Tax after reaching $12,150 of Net Investment Income, so the importance of trust income being classified as non-passive rather than passive has significantly increased with the advent of the 3.8% Tax.

Tax Consequences of Foreclosures, Deeds in Lieu of Foreclosure,
and Discharge of Indebtedness

For federal income tax purposes, the sale of real estate subject to a non-recourse mortgage to a third-party at a foreclosure sale is treated as if the mortgagor sold or exchanged the property to such third-party for the amount of the outstanding mortgage balance, not to exceed the fair market value of the property. Likewise, if property subject to a non-recourse mortgage is conveyed to the mortgagee in satisfaction of the debt, it is treated as a sale or exchange of the property by the mortgagor for the outstanding mortgage balance, without regard to the fair market value of the property.

For federal income tax purposes, the sale of mortgaged real estate to a third-party at a foreclosure sale is treated as if the mortgagor sold or exchanged the property to such third-party for the foreclosure sale price, and gain or loss is thus recognized as a result thereof (assuming that no applicable non-recognition provisions, such as the principal residence exclusion under Section 121, apply.)

Similarly, if a personally liable mortgagor conveys the property to the mortgagee as a deed in lieu of foreclosure which extinguishes the mortgage, it is treated as a sale or exchange of the property by the mortgagor for fair market value of the property. If the fair market value of the property is less than the outstanding balance of the mortgage, then the transaction is bifurcated – the transaction is treated as a sale or exchange to the extent of the fair market value of the property and as cancellation of indebtedness under Section 108 to the extent that the mortgage balance exceeds the property’s fair market value.

Discharge of Indebtedness (DOI) income occurs where a taxpayer is relieved of indebtedness by a creditor to the extent that the taxpayer did not pay consideration in exchange for such debt relief. DOI income is taxed at ordinary income rates but is subject to several exceptions that apply in certain situations.

DOI income generally is realized by the taxpayer when the debt is repurchased or satisfied at less than its outstanding balance. Under Section 108, DOI income will result if a debt is purchased for less than its outstanding balance by the debtor or by a party that is “related” to the debtor.

The following are exceptions to the recognition of DOI income:

  • The debt discharge occurs in a bankruptcy case under Title 11 of the US Code
  • To the extent that the taxpayer is insolvent at the time of the discharge or is made insolvent as a result of the discharge
    • For partnerships, insolvency is determined at the level of each partner; for S corporations and C corporations, the insolvency is determined at the corporate level.
  • The debt being discharged is “qualified farm indebtedness.”
  • The debt being discharged is “qualified real property business indebtedness,” which is:
    • Indebtedness incurred or assumed in connection with real property used in a trade or business, which was incurred or assumed to acquire, construct, reconstruct, or substantially improve such property, and with respect to which the taxpayer makes an election.
    • This exclusion only applies to taxpayers other than C corporations.
  • The debt being discharged is “qualified principal residence indebtedness,” but only if the discharge occurred between January 1, 2007 and December 31, 2014.

Using one of the above exceptions, the recognition of DOI income may result in the taxpayer having to reduce tax attributes or income tax basis in other real property.

Partnership v. S Corporation – Which is Better to Hold Real Estate?

Partnership Chart

Richard Connolly’s World
Settling an Estate After Death

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with links to the articles.

This week, the first article of interest is “The Widow’s Guide to Estate Planning and Wealth Transfer” by Sandra MacGregor. This article was featured on Forbes.com on June 2, 2015.

Richard’s description is as follows:

Drafting up a will can be an emotionally taxing process, but it’s one that becomes especially difficult when a spouse is left to cope with the task after their partner passes away. Suddenly, what was once a joint decision made with a lifelong partner becomes a task a widow must face alone.

Cinda J. Collins, Senior Vice President and Financial Advisor at RBC Wealth Management, knows this all too well. Despite having two years to prepare for her husband Bob’s passing when he was diagnosed with acute myeloid leukemia, Collins found the financial and emotional implications of settling his estate after he was gone were often overwhelming.

To help other widows cope with the process, Collins, along with Deborah Johnston, Senior Vice President and Financial Advisor at RBC Wealth Management, offer some advice on how couples can approach estate planning together, as well as what a surviving spouse should do in the unfortunate event their partner passes.

Please click here to read this article in its entirety.

The second article of interest this week is entitled “When Heirs Fight Over Assets with Sentimental Value” by Paul Sullivan. This article was featured in The New York Times on April 3, 2015.

Richard’s description is as follows:

Robin Williams’s widow, Susan Schneider, agreed that the rainbow suspenders he wore on the television comedy Mork & Mindy should go to his children from previous marriages, but she did want the tuxedo the comedian wore at their wedding. Simple, it might seem, but not in the complicated world of blended families.

Nearly eight months after Mr. Williams committed suicide in his home in Northern California, his children and his third wife were in court over a part of his estate plan that many people overlook. Who is entitled to stuff with more sentimental than monetary value?

But trust and estate lawyers said that this case, if stripped of its Hollywood glamour, would be no different from the many cases they see of children from previous marriages battling their parent’s last spouse over the smallest things.

Please click here to read this article in its entirety.

Thoughtful Corner
5 Steps to Relieve Procrastination –
How to Begin (and End!) a Project Successfully

We all know that there are some tasks and projects we resist doing, things we push off until the next day, next week, or next year. This is the cycle of procrastination, which, by definition, means the act of delaying or postponing something that should be done. We know what procrastination is, and we recognize that we are guilty of it. We even understand that procrastination is unproductive. Why do we continue to procrastinate, and what can we do to prevent it?

When we procrastinate, our conscious mind usually perceives obstacles or interruptions that “came up” to preclude the task in question. Have you ever found yourself suddenly organizing your sock drawer just as it was time to begin studying for a big exam? The excuses and the interruptions suddenly become very convenient. In truth, there are likely deeper reasons as to why you are putting something off, and such insights are often not immediately evident to you, the procrastinator.

Frequently, we resist the task at hand because we associate such task with pain, struggle, or discomfort in some way. Our concern that we will have to address or experience these feelings leads us to put off the task as long as possible. Often our subconscious mind blows this idea of pain or struggle way out of proportion, and the dread of anticipating the task is much worse than the short, painful experience of actually completing it.

Business advisor, author, and coach Rick Solomon, CPA, who teaches the Sedona Releasing Method, recommends that a procrastinator facing resistance should imagine living through the uncomfortable task or event and experience the struggle, challenge, or pain before the project has even begun. The fear of the unknown is usually much worse than any painful experience we actually face in our daily lives. Going to the “worst case scenario” when imagining a task may help to relieve tension, as the challenge may seem much more manageable once you have anticipated possible painful outcomes. This may also encourage you to reframe the project in a different way. You may discover a simpler solution. You may also discover that you can delegate the project to someone else or perhaps that the project is not really necessary at all.

Once you have re-evaluated the project or task, gained some perspective on what does or does not need to be done, and come to terms with the challenges you will have to experience, you can incorporate the 80/20 Rule. The 80/20 Rule has many applications, but in this setting, 20% of the effort required to effectuate any project will normally accomplish 80% of the results. The best solution is often to put your efforts toward the first 20% of the project, specifically planning and gathering required information, and then delegate to someone else or reprioritize for the remaining 80% of the work.

A sample brainstorming table for helping to organize your thoughts is below:

Procrastination Chart

The clearer and more specific you can make your process for dealing with procrastination, the easier it will be to move forward with challenging projects or tasks. The steps below will take 15-30 minutes to complete and will save you hours of delays, setbacks, and worries.

1. Discover the reason for your procrastination

Ask yourself the following two questions: Why am I procrastinating on this task? Is there a fear of pain involved?

Write the answers to these questions down, as writing often helps subconscious anxieties and fears reveal themselves. We recommend taking a few minutes to freely journal or take notes.

Hold yourself responsible for getting to the root of your procrastination. Don’t accept excuses of busyness or interruptions as your reasons for procrastination. Find out what is going on underneath these surface rationales.

2. Go to the “worst case scenario”

Imagine the full pain of the task at hand. Let yourself experience it completely. Write down the specifics of the worst case scenario if that is helpful, or close your eyes and visualize the worst case scenario happening to you. The point is to get the pain over with. Worrying about pain in advance for weeks on end is much worse in the long run than efficiently dealing with pain in the here and now.

3. Strategize about a more effective outcome

Once you have discovered the reason for your procrastination and dealt with the struggle or challenge involved, you are able to put aside the emotional aspect of the task and deal with it in a logical, strategic manner.

Write down your answers to the following questions:

Am I sure this project needs to be completed? What benefit does this project provide? At what cost?

Do I have to handle this entire project myself, or can some of it be delegated?

Which parts of the project can go to which people?

Using the 80/20 Rule, if I contribute 20% to this project, what actions will make my contribution most effective?

4. Take Action

Once you have laid out your basic strategy, create an action plan for you and others to follow. Include timelines and accountability between yourself and others to ensure the project or task is 100% completed.

Prioritize your project with reference to other projects and opportunities. Is it more or less important? More or less urgent?

Lay out specific action steps. Assign a date and a person for completion of each step. Delegate the parts of the project you have assigned to others, including a completion date that works for both parties.

Set a follow-up date for accountability with you and the people working on the project or task.

5. Celebrate your progress

Crossing a difficult project off your to-do list is a great accomplishment! Acknowledge your hard work and choose a way to reward yourself: an afternoon off, a drink with a friend, a trip to the beach, or whatever works for you.

As you practice these methods, you will find that dealing with procrastination becomes easier to identify and manage over time. Taking these 5 steps whenever you come up against resistance will boost your energy, save you time, and give you better results!

For a worksheet to help you work through these steps and stop procrastinating, please click here.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

***********************

Cartoon 1

Cartoon 2

Upcoming Seminars and Webinars

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on FINANCIAL RELATIONSHIPS WITH PATIENTS, CO-PAYMENTS, GIFTS, AND GRAFT – HOW TO STAY OUT OF TROUBLE UNDER FLORIDA AND FEDERAL LAW.

This is an essential guide for medical practices and those who advise them. There will be two opportunities to attend this presentation.

Date: Tuesday, July 7, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email Alan Gassman at agassman@gassmanpa.com.

***********************************************

LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR:

Alan Gassman will present a webinar on the topic of WHAT FLORIDA CPAS NEED TO KNOW ABOUT ASSET PROTECTION for the Florida Institute of CPAs.

More information about this webinar will be forthcoming. Please stay tuned!

Date: Thursday, July 9, 2015 | 9:30 AM – 10:30 AM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com. To register, please contact Thelma Givens at givenst@ficpa.org.

**************************************************

LIVE ORLANDO PRESENTATION:

ORLANDO BUSINESS AND PROFESSIONAL PRACTICE OWNER SYMPOSIUM

Alan S. Gassman, business coach and author David Finkel, and others will present a two-day conference for high-net-worth business and professional practice owners sponsored by Maui Mastermind®.

Alan’s topics will include BASIC AND ADVANCED PLANNING TECHNIQUES FOR THE PROTECTION OF WEALTH, THE 10 BIGGEST MISTAKES THAT BUSINESS OWNERS AND PROFESSIONALS MAKE, and ESTATE TAX AVOIDANCE TECHNIQUES FOR BUSINESS OWNERS AND PROFESSIONALS.

Other topics include A Proven Map to Grow Your Business and Get Your Life Back, Building Wealth Outside of Your Company, Tax Reduction Strategies, and Understanding How Investments Work and What They Cost.

Interested individuals can contact agassman@gassmanpa.com or David Finkel at david@mauimastermind.com.

Date: July 30th and 31st, 2015

Location: Hyatt Regency Orlando | 9801 International Drive, Orlando, FL 32819

Additional Information: To register, please click here or email agassman@gassmanpa.com.

********************************************

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

Alan Gassman’s Professional Acceleration Workshop was a fast-paced, information-packed, and highly instructional event.  Through interactive discussions of time-tested professional and personal growth strategies ranging from goal setting and problem solving to office efficiency and effective team building, Alan provides a thoughtful and measured approach to becoming a highly effective professional.  I left the workshop feeling invigorated and excited to implement the insights into my practice management and continued self-study.  The course materials and Alan’s compilation of trusted additional resources will be an invaluable resource for years to come.  Thank you for the opportunity to participate.

Christina Rankin, J.D., LL.M. (Taxation)
Trust and Estates Lawyer with Over 10 Years of Experience
Law Offices of Richard D. Green, J.D., LL.M.

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

****************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on the topic of EVERYTHING YOU ALWAYS WANTED TO KNOW ABOUT CREDITOR PROTECTION AND DIDN’T EVEN THINK TO ASK.

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman and a guest to be determined will present WHAT TAX PLANNERS NEED TO KNOW ABOUT NORTH DAKOTA TRUST LAW for Bloomberg BNA.

Date: Wednesday, September 9, 2015 | Time TBA

Location: Online webinar

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanp.com

*******************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

*****************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

*************************************************

LIVE WEBINAR:

Alan Gassman, Christopher Denicolo, and Kenneth Crotty will present a 50-minute webinar entitled CREATIVE PLANNING FOR FLORIDA REAL ESTATE with a guest (victim) to be determined. This presentation will be free and worth every dollar!

There will be two opportunities to attend this presentation. This webinar will qualify for CLE and CPE credit.

Date: Wednesday, September 23, 2015 | 12:30 PM or 5:00 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email agassman@gassmanpa.com.

**************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

****************************************************

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Christopher Denicolo will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)
 

LIVE ORLANDO PRESENTATION: 

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING 

Date: January 11 – January 15, 2016 

Location: To be announced 

Additional Information: Information on the 50th Annual Heckerling Institute on Estate Planning will be available on August 1, 2015. To learn about past Heckerling programs, please visit http://www.law.miami.edu/heckerling/.

*******************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins, which is not affiliated with Anthony Hopkins.

Please provide us with your input for other topics for this year and next! Watch this space for more speaker and topic announcements.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

June Rates

The Thursday Report – 6.18.15 – And Now For Something Completely Thursday

Posted on: June 18th, 2015

Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability

A Logical Guide to Selecting a Buy-Sell Agreement Arrangement – Traditional Choices are Not Always Best

Tax Court Approves the Mother of All Crummey Trusts with 60 Beneficiaries, Part II

Richard Connolly’s World – Planning for the Future

John Cleese & Eric Idle in Clearwater

Thoughtful Corner – Your Email is Evidence Mail

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability

The Office of Inspector General (OIG) of the U.S. Department of Health and Human Services conducted a criminal and also civil activities investigation of Medicare and other federal payors, and will often fire a shot over an industry’s bow at the time they begin implementing an initiative of investigation and possible prosecution.  We will discuss the below replicated June 9, 2015 fraud alert with veteran healthcare lawyer Lester Perling on a 15 minute free webinar to air on Monday, June 22, 2015 at 5:00 p.m.

The following alert language, reproduced below verbatim, says it all!

Physicians who enter into compensation arrangements such as medical directorships must ensure that those arrangements reflect fair market value for bona fide services the physicians actually provide. Although many compensation arrangements are legitimate, a compensation arrangement may violate the anti-kickback statute if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals of Federal health care program business. OIG encourages physicians to carefully consider the terms and conditions of medical directorships and other compensation arrangements before entering into them.

OIG recently reached settlements with 12 individual physicians who entered into questionable medical directorship and office staff arrangements. OIG alleged that the compensation paid to these physicians under the medical directorship arrangements constituted improper remuneration under the anti-kickback statute for a number of reasons, including that the payments took into account the physicians’ volume or value of referrals and did not reflect fair market value for the services to be performed, and because the physicians did not actually provide the services called for under the agreements.

OIG also alleged that some of the 12 physicians had entered into arrangements under which an affiliated health care entity paid the salaries of the physicians’ front office staff. Because these arrangements relieved the physicians of a financial burden they otherwise would have incurred, OIG alleged that the salaries paid under these arrangements constituted improper remuneration to the physicians. OIG determined that the physicians were an integral part of the scheme and subject to liability under the Civil Monetary Penalties Law.

Those who commit fraud involving Federal health care programs are subject to possible criminal, civil, and administrative sanctions. For more information on physician relationships, see OIG’s “Compliance Program Guidance for Individual and Small Group Physician Practices” available at http://oig.hhs.gov/authorities/docs/physician.pdf and OIG’s “A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse” available at http://oig.hhs.gov/compliance/physician-education/roadmap_web_version.pdf.

If you have information about physicians or other providers engaging in any of the activities described above, contact the OIG Hotline at https://forms.oig.hhs.gov/hotlineoperations/ or by phone at 1-800-447-8477 (1-800-HHS-TIPS).

For more information on the recent OIG Fraud Alerts, please join Alan Gassman and Lester Perling for a free webinar on the topic. The webinar will be held on Monday, June 22nd at 5:00 PM. Please click here to register.

webinar ad - FINAL

A Logical Guide to Selecting a Buy-Sell Agreement Arrangement:
Traditional Choices are Not Always Best

by Alan Gassman

The following memorandum offers points to consider when choosing how to best arrange a buy-sell agreement, and summarizes why Cross Purchase and Redemption Agreements are most often, in our opinion, not “the best solution”:

Entity Redemption Arrangements

In an entity redemption arrangement, the company owns the life insurance policy and is the beneficiary thereof. Upon receipt of the life insurance proceeds, the company is to use such proceeds to buy out the deceased owner.

Some questions to consider before choosing an Entity Redemption Arrangement are as follows:

  1. Will there be enough money to (A) buy out the deceased owner and (B) have the deceased owner released from any and all guarantees and obligations associated with the business?
  2. If it is not practical to have the deceased owner released for contractual or other reasons, should the part of the life insurance proceeds that would otherwise be kept by the company as key man insurance be escrowed pending satisfaction of all releases that the deceased owner may have responsibility for?
  3. How can the deceased owner’s family be sure that the monies received from the life insurance policy will actually be used to satisfy contractual buy-out agreements?
  4. What if the company claims that, for some reason, the agreement is not enforceable or that there are claims against the deceased owner that offset what would be paid to him or her?
  5. What if the company has a major creditor claim against it (what if the deceased owner died in a car accident that he or she caused while driving a company vehicle, and the company is now being sued by others who died in the accident?)
  6. What if the company goes into bankruptcy and the family of the deceased owner becomes just another creditor in a bankruptcy proceeding?
  7. For income tax purposes, the remaining shareholders do not get a stepped-up basis for the stock purchased. The stock simply becomes treasury stock.

Cross-Purchase Agreements

To avoid the above potential problems, consider a cross-purchase agreement.

Each owner may own the policy or policies on the other owners. Thus, the policy proceeds should be protected from creditors of the company.

Additionally, each purchasing shareholder will get a tax basis in the purchased stock equal to the purchase price thereof. However, policy proceeds will not be protected from creditors of the surviving owner who would receive policy proceeds.

Also, contractual disputes could result in the surviving owner using the funds for other purposes while litigating over the obligation to pay and becoming insolvent.

Further, if there are more than two shareholders, then, on the death of one, the policies owned on the others would need to be transferred to rebalance between them, thus causing issues under the transfer for value rules. For example, if there are four equal shareholders, there has to be four policies, each owned one-third each by three shareholders on the fourth, and if one leaves the company, the remaining three policies have to be readjusted as to ownership. Under the transfer for value rules, this could cause the proceeds of a policy to be subject to income tax.

Hybrids of the Above

Consider a Trusteed Corporate or Cross-Purchase Agreement. Under these arrangements, the owner and beneficiary of the policy can be a trust company, a law firm, or another trusted institution as trustee for the benefit of the company in a Trusteed Redemption arrangement, or for the benefit of the other shareholder or shareholders in a Trusteed Cross Purchase arrangement. The trust agreement can require that the policy proceeds be held safely until sale and used solely for redemption or cross-purchase purposes.

This, at least, assures the surviving family that the life insurance proceeds will not be absconded with.

Generally, for tax purposes, the policy needs to be considered as owned and payable to the company in a redemption arrangement or the surviving owner or owners in a cross-purchase agreement. Could a state court or a bankruptcy court override the trust agreement where there are creditors of the entity in a redemption arrangement or creditors of the remaining shareholders in a cross-purchase arrangement?

There would be a purchase price tax basis for the other shareholders if the Trustee appropriately characterized as an agent for the other shareholders.

The Best Solution

Use of a Related Partnership to Facilitate Purchase is the best solution. Because of the above concerns, oftentimes a separate limited partnership or limited liability company is established to own and facilitate the life insurance buy-out arrangement.

This entity will be taxed as a partnership to avoid the transfer for value rules that would otherwise be problematic if there are more than two owners. Shifts of ownership in the policy would apply if there was a redemption arrangement.

The transfer for value rules do not apply when there is a reapportionment of entitlement to the proceeds of life insurance for use in a buy-sell arrangement between partners under a partnership. The partnership may have an additional investment besides the life insurance to help assure that it is recognized as a partnership for federal income tax purposes.

If the separate partnership is purchasing the interest in the entity on behalf of its surviving partners, who are the surviving owners of the operating entity, then a creditor of the company would have no claim against the policy proceeds, and a creditor of an individual “partner” in the partnership entity might have a claim against the member or partnership interest of the individual partner, but this would not permit the creditor to reach into the partnership to have a claim against the policy proceeds if appropriate charging order protection applies.

The redemption arrangement and the separate partnership arrangement described above should avoid this result.

The above strategy was blessed by the IRA in Private Letter Ruling 200747002, which discussed having term insurance held under an LLC taxed as a partnership to facilitate the buy-sell arrangement. Under this Private Letter Ruling, the manager of the LLC was a trust company that was required to use monies contributed to the LLC to purchase and maintain life insurance to fund a separate cross-purchased buy-sell agreement between three related shareholders. It would be possible to have permanent life insurance and to have special allocations of entitlement as to policy values under an LLC/partnership agreement. See The Advanced Planner, Volume 5, Issue #1, May-June 2008 at www.zelllaw.com and the ING publication entitled “Buy-Sell Planning Using Life Insurance/Buy-Sell Arrangements Using a General Partnership.”

Tax Court Approves the Mother of All Crummey Trusts with 60 Beneficiaries, Part II
by Ed Morrow and Alan Gassman

Last week, we featured Part I of a LISI newsletter by Ed Morrow and Alan Gassman regarding the case of Mikel v. Commissioner, which you can view by clicking here. Ed and Alan’s commentary on the case is featured below, and a silly poem about it (The Tax Lawyer on the Roof) can be viewed by clicking here.

COMMENT:

One of the important takeaways from the Mikel decision is: “Don’t forget the basic garden variety Crummey trust and to draft carefully!”

After clearing away the smoke created by the in terrorem clauses and religious arbitration panels, the result remains that the taxpayers were able to transfer illiquid assets into a trust and qualify for $1.44 million of tax-free gifts (this would translate to $1.68 million in 2015 with the exclusion now adjusted to $14,000 per donor per donee). Assuming the taxpayers remain New York residents, these tax-free gifts may save the family not only 40% federal estate tax but also the 16% New York estate tax.

The Crummey power beneficiaries included minors and spouses of family members as well. The IRS conceded more than 40 years ago that minors could have a present interest if there was no impediment to appointment of a guardian to make the withdrawal, in Rev. Rul. 73-405, so this was not an issue. We can also assume that the spouses had not only withdrawal powers but also distribution rights so that they were legitimate beneficiaries of the trust having a business reason to not exercise their withdrawal rights. There was no discussion as to whether such spouses would continue or be removed as beneficiaries of the trust in the event of a divorce (aka “floating spouse provisions”), which might have also been a logical line of IRS attack.

Should practitioners use forfeiture and in terrorem clauses for Crummey trusts? To interpret the above in terrorem clause, the Tax Court resorted to a canon of construction known as noscitur a sociis, a Latin phrase meaning “it is known by its associates.” Any time a court resorts to obscure Latin canons to rule on a case, there is probably an opportunity to draft a clearer trust! Attorneys should draft any such clause to make it crystal clear that any forfeiture and/or in terrorem clause does not apply to impair the withdrawal right.

However, a narrowly crafted in terrorem and forfeiture clause can be acceptable in Crummey trusts so long as the demand right is not impaired. For instance, a practitioner may want any hanging power or other mandatory right aside from a current Crummey power to be eliminated in the event of a creditor attack. While this may cause a minor gift tax event in the event of a hanging power, this may be the lesser of two evils compared to the corpus being seized by a creditor. Forfeiture clauses were recently upheld as protecting a beneficiary’s interest in trust from creditors in the recent federal district court’s reversal of the Castellano bankruptcy court decision which had initially denied protection.

Another potential issue brought up by the case, but only tangentially discussed in the third footnote, is the effect of the trustee’s discretionary ability to exclude beneficiaries from any withdrawal rights that stem from future contributions by the settlors. The IRS and the Tax Court agreed that this provision did not apply to the contributions in 2007 that initially funded the trust, so the issue was not relevant to decide the case. However, practitioners should be extremely careful about using such a clause. Have the Mikels made contributions in 2008-2015 to this trust to which that clause may apply? If so, and the trustee can, in his discretion, exclude beneficiaries from a withdrawal right, there may not be a present interest. Ultimately, it depends on the exact wording of the clause – the entire provision was not included in the case. However, the general idea may be dangerous if not carefully considered.

Such a clause is completely different from giving such a power to the settlors to decide future withdrawal rights via deed of gift, but it could probably be drafted to ensure a present interest. Let’s compare the settlor and trustee Crummey gatekeeper varieties and contrast with a concrete example. Let’s say the Mikels decided to make another $560,000 gift to the trust in 2015. They really don’t want to give sixty beneficiaries the withdrawal right. They only need to do so for twenty ($14,000 x 2 x 20 = $560,000), assuming no other gifts.

Now assume that some of the beneficiaries have creditors, marital strife, financial aid or special needs issues. If the trustee can choose the lucky twenty beneficiaries AFTER the gift is made, whether before notice or not, then no beneficiary has a present interest at the time of gift, the withdrawal right would only vest when the trustee chooses. This may be effective to create a withdrawal right but not to retroactively create a present interest. By contrast, if the trustee chooses beneficiaries eligible for the withdrawal right before or at the time of gift, each Crummey beneficiary’s withdrawal right would exist at the time of gift.

Although there is no case or ruling on this point, practitioners may even want to examine their state decanting statute that might enable the trustee to effectively accomplish the same result as above if not effectively curbed. While most decanting statutes, such as Florida’s or Ohio’s, would prohibit the trustee from eliminating a vested withdrawal right, that is not necessarily true of all decanting statutes. If the trustee can unilaterally revoke the right, the IRS may have a better argument that the power is illusory.

While it is clear that the withdrawal right should commence at the time of gift, attorneys differ on when the withdrawal right should lapse. Should the lapse occur within a reasonable time after the gift, or not until a reasonable time after notice, which may be quite some time later. In the Mikel case, notice was sent four months later. In Turner Est. v. Comr. (T.C. Memo 2011-209 (2011)), the Tax Court found that it is the existence of the legal withdrawal power itself, and not the fact that the beneficiary had notice of it, that permits the power to qualify for the annual exclusion.

The court in Turner also found that the estate need not provide beneficiaries notice of their withdrawal powers; concluding, “the fact that some or even all of the beneficiaries may not have known that they had the right to demand withdrawals from the trust does not affect their legal right to do so.” This same conclusion was echoed in a footnote in the Cristofani case (Estate of Cristofani v. Commissioner, 97 T.C. 74 (1991), and was similar to the rationale in original Crummey case, in which the beneficiaries probably did not have notice.

So why bother with any notice? The Turner opinion is in direct contrast to Rev. Rul. 81-7, 1981-1 C.B. 474, where the IRS opined that a beneficiary must be given notice of any withdrawal right in order for the gift to be considered a present interest.

To follow Rev. Rul. 81-7, therefore, any lapse should be tied to notice. However, this may be overly conservative in light of the case law and could lead to other asset protection concerns – if a beneficiary is sued and attacked by creditors, can he/she adequately prove receipt of prior notices and the subsequent lapses? Similarly, when the beneficiary dies, the uncertain lapse may cause greater estate inclusion. Thus, perhaps the best approach may be to require that the notice be given, but to have the withdrawal power lapse within the earlier of 15 days after notice or a reasonable time after the gift, which may be longer, such as 2-6 months. This would allow a timely notice to accelerate the lapse or provide some protection in the event notice is inadvertently not given. Obviously, this is subject to the necessity of having hanging powers when used as a part of generation skipping trust and associated planning. A period no longer than sixty days from the gift would be recommended if a spouse is a Crummey beneficiary and GST will be allocated to avoid the Estate Tax Inclusion Period (ETIP).[1]

Could this case be the straw that breaks the camel’s back for million-dollar Crummey power trusts? The IRS has disliked the Crummey case and its ever more expansive progeny, such as Cristofani and Kohlsaat, for decades. In the 2015 Greenbook, the Obama Administration has heard their pleas and argued for passage of a new provision that would greatly simplify, but undercut, the use of such provisions.

Under the new proposal, the annual exclusion gift would be expanded and increased to $50,000/yr. – and the “present interest” requirement currently in §2503(b) would be eliminated. This would be a boon to small families, greatly simplifying trust administration and compliance – Crummey powers would no longer be needed. Moreover, disputes as to whether a closely held business constitutes a present interest, as litigated in the Hackl, Fisher, and Price cases, would also go away. To quote the Greenbook, “the cost to taxpayers of complying with the Crummey rules is significant, as is the cost to Internal Revenue Service (IRS) and enforcing the rules.” However, the new and improved annual exclusion would be a total annual cap of $50,000 per donor – not per donee. For a family like the Mikels, this would mean reducing the annual exclusion benefit from $1.68 million per year to only $100,000 per year.

Another reason the Administration may see this case as ammunition for change is the less obvious loophole that Crummey and its progeny create to avoid income taxes. For instance, even if the Mikels had a non-taxable estate, they can transfer $1.68 million (and increasing) in property to trusts, gift tax free, and grant older beneficiaries, or themselves (with limitations of reciprocal trusts, completed gift and other issues), powers that would cause selective estate inclusion upon any beneficiaries’ death up to the maximum amount that would not cause estate taxes. This allows a step-up in basis upon any power holder’s death, including any older power holders, which is not generally hampered by the same issues that may constrain a JEST, Estate, or Community Property Trust.

******************************************
[1] Treas. Reg. § 26.2632-1 (c)(2)(ii)(B).

Richard Connolly’s World
Planning for the Future

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with a link to the articles.

This week, the first article of interest is “Why Estate Planning for a Distant Future Requires Flexibility” by Anna Prior. This article was featured in The Wall Street Journal on May 4, 2015.

Richard’s description is as follows:

The very wealthy often expect their family fortune to last for generations. The challenge these days, when the pace of change seems to be ramping up, is getting them to plan that far ahead.

Financial advisers and estate planning professionals say many of their clients feel uncertain about the kind of world their heirs will inhabit, what with advances in technology, political and economic upheaval, and even fast-evolving views of what constitutes a family.

These concerns can be addressed by emphasizing flexibility and employing a variety of estate planning techniques to make sure that a multigenerational trust – and a family’s financial legacy – isn’t too rigid, advisers say.

Please click here to read this article in its entirety.

The second article of interest this week is entitled “Tips for the Future Care of Disabled Family Members” by Tara Siegel Bernard. This article was featured in The New York Times on March 27, 2015.

Richard’s description is as follows:

Planning for family members with special needs can be overwhelming, particularly when so many decisions may have lifelong consequences. Beyond figuring out the intricacies of government programs, parents fret over guardianships, how governmental services may erode, and what legal documents they need.

And soon, there will be a new savings account to consider, known as a 529A or ABLE account, which will permit people with disabilities to keep more money in their own names without losing means-tested benefits.

This article provides a few tips for families beginning to plan for individuals with special needs.

Please click here to read this article in its entirety.

John Cleese & Eric Idle in Clearwater

John Cleese and Eric Idle of Monty Python fame are bringing their show to Clearwater! This is a production not to be missed!  If you are not familiar with the work of John Cleese and Eric Idle, check out Spamalot and Fawlty Towers.

John Cleese & Eric Idle: Together Again At Last…For the Very First Time will be performed on October 14 and October 15 at Ruth Eckerd Hall. REH’s description of the show is as follows:

In Together Again At Last…For the Very First Time, Cleese and Idle will blend scripted and improvised bits with storytelling, musical numbers, exclusive footage, aquatic juggling, and an extended audience Q&A to craft a unique comedic experience with every performance. No two shows will be quite the same, thus ensuring that every audience feels like they’re seeing the show for the very first time. And now you know why the show is called that, don’t you?

As founding members of Monty Python, Cleese and Idle are unarguably among the godfathers of modern comedy, helping to pioneer an irreverent, absurdist sensibility that is emulated by comics around the world. As individuals, they have written, performed, and produced some of the most beloved and critically-acclaimed shows of all time, including Spamalot, A Fish Called Wanda, Fawlty Towers, and The Rutles.

Tickets to Together Again At Last…For the Very First Time go on sale to the public on Friday, June 19, 2015 at 10:00 AM. Please click here to purchase tickets or for more information about the show.

Thoughtful Corner
Your Email is Evidence Mail

Miami lawyer and law professor Denis Kleinfeld coined the term “evidence mail” to emphasize that emails can and will often reveal problematic messages and communications in litigation.

Even emails that you send your clients will be discoverable if the client forwards them to non-privileged parties or if the client permits the emails to be disclosed. These emails may paint you in a very negative tone from the standpoint of typographical errors, poor grammar, snappiness, or reading something the wrong way.

A client has the right to request their client file, and if you have put something flippant about the client in an email to another team member, will the client see this email, and will it be held against you?

Lawyers and CPAs are covered under the lawyer/client privilege, as are experts who are retained under a “Kovol” confidentiality letter or agreement. Even arm’s-length parties engaged in a transaction or negotiations may enter into a joint defense agreement to enable their communications through lawyers and other professionals to remain confidential under the attorney/client privilege. But what about when a tax lawyer or CPA writes a letter to a financial planner describing what the financial plan is and what possible potential tax issues might arise?

The IRS will certainly want to see any correspondence or emails that express concerns about how a certain transaction or arrangement will be taxed, and if those would be admissible to be seen by an IRS appeals officer or a Court of Claims or a federal district court judge overseeing a tax controversy, major damage may be done to a client’s case.

The law on whether communications with a financial planner will be privileged is a bit murky, and taxpayers have been successful in the past in convincing IRS auditors that such communications are privileged, but the law is not very clear on this, so care needs to be exercised.

On the other hand, how can you appropriately use the team approach and make sure everyone is on the same page if you are not able to write a letter or email confirming what has been discussed in meetings or otherwise?

One way to handle this is to have a meeting, discuss it orally, and then provide a memorandum which reviews what was said after everyone who was at the meeting agrees to as being accurate.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

***********************

Marcia Gassman has survived 34 years of marriage to a tax lawyer!

Marcia 1

Her advice to other spouses is that in order to survive you must do the following:

Laugh a lot!

epeoplelaughing

Drink a lot!

kbusinessafterwork

Become a cartoon character!

Marcia 2

The Thursday Report thanks Marcia for her incredible tolerance and for not leaving Alan to become half-owner of the Thursday Report or the owner of an every other Thursday Report.  Their inability to divide this asset has kept them together for the last two years.

***********************

IN THE NEWS
by Ron Ross

Avocados Strive for World Domination
aka The Story of Avacad-O

Until recently, scientists were confident that they had confined the avocado to California. In the past few years, however, avocados began appearing in the east, first camouflaged in salads, then in puree form next to the nachos, the salsa, and that dip pretending to be cheese.

It had been assumed that avocado and bacon could not exist in proximity to one another, much like matter and anti-matter, but this combination has now been found in sandwiches around the country, with worrying implications for the future of digestion.

Public Health officials maintain that the fear of avocados is overblown, despite the fact that guacamole, the evil offspring of avocado, looks exactly like the creeping green slime that science fiction movies always warned us about. Further, they say our unreasonable fear reminds them of the hysteria that was associated with the “killer bee” scare of the 1970s. They point out that “killer bees” came from Mexico, the original home of the avocado, and are we prejudiced or something?

These officials insist that everything is fine as long as we completely destroy the black thing inside of the avocado and under no circumstances keep it and allow something to grow out of it.

Upcoming Seminars and Webinars

LIVE WEBINAR:

Lester Perling and Alan Gassman will be presenting a free, live, 15-minutes webinar on THE OIG’S WARNING SHOT ABOUT PHYSICIAN COMPENSATION AND MEDICAL DIRECTORSHIPS.

Date: Monday, June 22, 2015 | 5:00 p.m. (15 minutes)

Location: Online webinar

Additional Information:  To register for the webinar, please click here.

********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman, Christopher Denicolo, Jerome Hesch, and Stephen Breitstone will present a Bloomberg BNA Webinar on CREATIVE TAX PLANNING FOR REAL ESTATE TRANSACTIONS AND INVESTORS: A PRACTICAL GUIDE FOR REAL ESTATE AND TAX ADVISORS AND THEIR CLIENTS.

Date: Tuesday, June 23, 2015

Location: Online webinar

Additional Information: To register for this webinar, please click here. For more information, please email agassman@gassmanpa.com.

********************************************************

LIVE WEBINAR:

Alan Gassman and noted trust and estate litigator, LL.M in estate planning, and blog master Juan Antunez, J.D., LL.M. will present a free 30-minute webinar on HOW AND WHEN TO USE ARBITRATION CLAUSES FOR TRUSTS AND WILLS. 

Don’t miss Juan’s wonderful blog site entitled Florida Probate & Trust Litigation Blog, which can be accessed by clicking here, and the many very useful articles thereon.

Date: Thursday, June 25, 2015 | 12:30 PM

Location: Online webinar

Additional Information: To register for this webinar, please click here.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on FINANCIAL RELATIONSHIPS WITH PATIENTS, CO-PAYMENTS, GIFTS, AND GRAFT – HOW TO STAY OUT OF TROUBLE UNDER FLORIDA AND FEDERAL LAW.

This is an essential guide for medical practices and those who advise them. There will be two opportunities to attend this presentation.

Date: Tuesday, July 7, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email Alan Gassman at agassman@gassmanpa.com.

***********************************************

LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR:

Alan Gassman will present a webinar on the topic of WHAT FLORIDA CPAS NEED TO KNOW ABOUT ASSET PROTECTION for the Florida Institute of CPAs.

More information about this webinar will be forthcoming. Please stay tuned!

Date: Thursday, July 9, 2015 | 9:30 AM – 10:30 AM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com. To register, please contact Thelma Givens at givenst@ficpa.org.

**************************************************

LIVE ORLANDO PRESENTATION:

ORLANDO BUSINESS AND PROFESSIONAL PRACTICE OWNER SYMPOSIUM

Alan S. Gassman, business coach and author David Finkel, and others will present a two-day conference for high-net-worth business and professional practice owners sponsored by Maui Mastermind®.

Alan’s topics will include BASIC AND ADVANCED PLANNING TECHNIQUES FOR THE PROTECTION OF WEALTH, THE 10 BIGGEST MISTAKES THAT BUSINESS OWNERS AND PROFESSIONALS MAKE, and ESTATE TAX AVOIDANCE TECHNIQUES FOR BUSINESS OWNERS AND PROFESSIONALS.

Other topics include A Proven Map to Grow Your Business and Get Your Life Back, Building Wealth Outside of Your Company, Tax Reduction Strategies, and Understanding How Investments Work and What They Cost.

Interested individuals can contact agassman@gassmanpa.com or David Finkel at david@mauimastermind.com.

Date: July 30th and 31st, 2015

Location: Hyatt Regency Orlando | 9801 International Drive, Orlando, FL 32819

Additional Information: To register, please click here or email agassman@gassmanpa.com.

********************************************

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

***********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

Alan Gassman’s Professional Acceleration Workshop was a fast-paced, information-packed, and highly instructional event.  Through interactive discussions of time-tested professional and personal growth strategies ranging from goal setting and problem solving to office efficiency and effective team building, Alan provides a thoughtful and measured approach to becoming a highly effective professional.  I left the workshop feeling invigorated and excited to implement the insights into my practice management and continued self-study.  The course materials and Alan’s compilation of trusted additional resources will be an invaluable resource for years to come.  Thank you for the opportunity to participate.

Christina Rankin, J.D., LL.M. (Taxation)
Trust and Estates Lawyer with Over 10 Years of Experience
Law Offices of Richard D. Green, J.D., LL.M.

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

****************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on the topic of EVERYTHING YOU ALWAYS WANTED TO KNOW ABOUT CREDITOR PROTECTION AND DIDN’T EVEN THINK TO ASK.

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

*****************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

*************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

****************************************************

LIVE WEBINAR:

Alan Gassman, Ken Crotty, and Christopher Denicolo will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)
 

LIVE ORLANDO PRESENTATION: 

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING 

Date: January 11 – January 15, 2016 

Location: To be announced 

Additional Information: Information on the 50th Annual Heckerling Institute on Estate Planning will be available on August 1, 2015. To learn about past Heckerling programs, please visit http://www.law.miami.edu/heckerling/.

*******************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins, which is not affiliated with Anthony Hopkins.

Please provide us with your input for other topics for this year and next! Watch this space for more speaker and topic announcements.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Applicable Federal Rates

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

June Rates

The Thursday Report – 6.11.15 – 2704 Regulations – Watch Out Family Entities!

Posted on: June 11th, 2015

For Tax Lawyers Who Like to Worry – The Hopefully Remote Possibility of Treasury Regulations Being Issued Under Internal Revenue Code 2704

Upcoming Section 2704 Proposed Regulation May Impact Valuation Discounts for Family Entities by Steve R. Akers

Tax Court Approves the Mother of All Crummey Trusts with 60 Beneficiaries, Part I

Richard Connolly’s World – Asset Protection in a Digital World

Thoughtful Corner – Success Tips for First Year Lawyers, Part II

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

For Tax Lawyers Who Like to Worry:
The Hopefully Remote Possibility of Treasury Regulations Being Issued Under Internal Revenue Code 2704

Some commentators have long anticipated that the Treasury would release regulations under Internal Revenue Code 2704, although no proposed regulations have been issued. At a recent American Bar Association Tax Section meeting, Cathy Hughes of the United States Treasury had some comments about possible proposed regulations under the IRS proposed regulations under Internal Revenue Code Section 2704.

At this time, the release of such regulations is speculation and would not have any effect until proposed regulations are released by the Treasury, at the very earliest. Nevertheless, it is important to keep abreast of further developments on this topic.

Section 2704 was enacted in 1990 with the objective of limiting discounts for certain family partnership or LLC interests that are conveyed between family members. The Section operates to disregard certain “applicable restrictions” that apply to the interests in question for the purposes of valuing such interest. This would result in the value of such interests being higher than they would otherwise be if the applicable restrictions were recognized.

Ms. Hughes indicated that the new proposed regulations might expand the scope of restrictions that would be disregarded for the purposes of valuing an interest in a family limited partnership or LLC. These regulations might also disregard restrictions that apply to a transferee of an interest in a family limited partnership or LLC, and restrictions that might apply if a third party non-family member owns an interest in the applicable entity.

At this time, the discussion of the proposed regulations to Section 2704 is speculative, but it is possible that the Treasury and the IRS could push for any such proposed regulations to be retroactively effective on the date of which they were proposed, which could be later this year.

For a more in-depth discussion of possible regulations under Section 2704, please see the excellent discussion provided by Steve Akers of Bessemer Trust, which has been reproduced below with Steve’s permission.

Upcoming Section 2704 Proposed Regulation May Impact Valuation Discounts for Family Entities
by Steve R. Akers

akers_steve

Steve R. Akers is a Managing Director with Bessemer Trust in Dallas, Texas, where he is a Senior Fiduciary Counsel of the Southwest Region. Mr. Akers is a member of the Advisory Committee to the University of Miami Philip E. Heckerling Institute on Estate Planning and is a frequent speaker at the event, as well as other estate planning seminars across the country. He is a Fellow of the American College of Trust and Estate Counsel and currently serves as a member of the Executive Committee, Regent, and Chair of the Business Planning Committee. Akers is a co-author of A Planning Guide to Buy-Sell Agreements and Estate Planning After the Tax Relief and Job Creation Action Act of 2010. He can be reached at akers@bessemer.com.

IRS and Treasury officials have indicated that a new §2704 proposed regulation may be issued sometime this year. A proposal to amend §2704 (presumably to provide legislative support for positions the IRS will take in the proposed regulation) was dropped several years ago, but that legislative proposal reportedly points to the scope of what the proposed regulation will cover. Section 2704 deals with “liquidation restrictions,” but the new proposed regulation may create additional categories of “disregarded restrictions” that may impact valuation discounts for family entities. There is a possibility that the proposed regulation will be effective when finalized retroactive to the date of the issuance of the proposed regulation.

I. OVERVIEW

Section 2704(b)(3) gives the Treasury broad authorization to issue regulations that would disregard certain “other restrictions” in determining the value of an interest in a corporation or partnership transferred to a family member if the restriction “does not ultimately reduce the value of such interest to the transferee.” IRS and Treasury officials hinted about eight years ago that they were close to issuing such a proposed regulation (reflecting a §2704 guidance project that was placed on the IRS/Treasury Priority Guidance Plan in 2003), but President Obama’s first budget proposal included a revenue proposal to revise §2704, and the §2704 regulation project was put on hold pending the possible passage of such legislation that might provide legislative support for the positions the new proposed regulation might take. Not a single bill was ever introduced addressing the legislative proposal, however, and the §2704 legislative proposal was omitted from the President’s budget proposal released in February 2012.

II. SECTION 2704 STATUTORY BACKGROUND

Section 2704 was enacted in 1990 as a part of Chapter 14. The goal in particular was to limit discounts for certain family partnership or LLC interests that are transferred to family members. Section 2704(b) is titled “Certain Restrictions on Liquidation Disregarded.” It provides that any “applicable restriction” is disregarded in valuing an interest in a corporation or partnership that is transferred to a family member if the transferor and family members control the entity. An “applicable restriction” is any restriction that (i) effectively limits the ability of the corporation or partnership to liquidate, and (ii) the restriction lapses (entirely or partially) after the transfer OR the transferor or family members can remove the restriction (entirely or partially), but an “applicable restriction” does not include “any restriction imposed, or required to be imposed, by any Federal or State law” (or commercially reasonable restrictions imposed by unrelated persons in a financing transaction).

Section 2704(b)(4) includes broad legislative authority for the IRS to issue regulations that would disregard “other restrictions”:

The Secretary may by regulations provide that other restrictions shall be disregarded in determining the value of the transfer of any interest in a corporation or partnership to a member of the transferor’s family if such restriction has the effect of reducing the value of the transferred interest for purposes of this subtitle but does not ultimately reduce the value of such interest to the transferee.

The title to §2704(b) is “Certain Restrictions on Liquidation Disregarded.” The authorization of regulatory authority in §2704(b)(4) does not specifically limit the regulations to “other liquidation restrictions” but merely refers to “other restrictions.” Does this provide legislative authority for regulations limiting discounts for reasons other than merely disregarding liquidation restrictions despite the title of §2704(b)?

III. SIGNIFICANCE OF STATE LAW EXCEPTION

The exception for “any restriction imposed, or required to be imposed, by any Federal or State law” is very important. The “state law” exception is clearly integrated into the existing regulations.

“An applicable restriction is a limitation on the ability to liquidate the entity (in whole or in part) that is more restrictive than the limitations that would apply under the State law generally applicable to the entity in the absence of the restriction…Ability to remove the restriction is determined by reference to the State law that would apply but for a more restrictive rule in the governing instrument of the entity…A restriction imposed or required to be imposed by Federal or State law is not an applicable restriction.” Treas. Reg. §25.2702-2(b).

“(c) Effect of disregarding an applicable restriction – If an applicable restriction is disregarded under this section, the transferred interest is valued as if the restriction does not exist and as if the rights of the transferor are determined under the State law that would apply but for the restriction” Treas. Reg. §25.2704-2(c).

The exception for restrictions imposed by State law has dramatically reduced the applicability of §2704 to partnership and LLC transfers. Many state legislatures have revised limited partnership and LLC laws after the passage of §2704 to provide various limitations on the rights of limited partners or LLC members to make transfers under default rules that apply unless the partnership or operating agreement specifically overrides those default rules.

IV. UPCOMING REGULATION PROJECTS

Cathy Hughes [of the Office of Tax Policy, Department of Treasury] provided insight as to the regulation projects impacting estate planners that we might expect to see in the near future. Projects that she mentioned include: (1) Final portability regulations (the temporary regulations expire June 15, 2015); (2) Guidance under the ABLE Act allowing states to create “Section 529-type” accounts for the disabled (which would also likely appear in June); (3) Final regulations regarding basis rules for interests in charitable remainder trusts; (4) Guidance regarding the §2801 tax on gifts by certain expatriates to US citizens and residents (this has been a “high priority” for several years); and after that guidance is issued (5) Section 2704 proposed regulations. (The preceding information is based on a summary of the ABA Tax Section meeting by Diane Freda. Freda, Guidance on Material Participation for Trusts, Estates May Emerge in Stages, BNA Daily Tax Report (May 12, 2015).)

This summary suggests that the §2704 regulations will not be issued within the next several months but might conceivably be issued later this summer or this fall. Cathy Hughes said that various Treasury initiatives (she did not specifically include all of the projects listed above) are likely to be delivered before the ABA Tax Section fall meeting (which is September 17-19, 2015).

V. POSSIBLE SCOPE OF NEW §2704 PROPOSED REGULATION

Cathy Hughes said that the scope of what the new regulations might include are indicated by the §2704 legislative proposal (last included in the Fiscal Year 2013 Greenbook, “General Explanations of the Administration’s Fiscal Year 2013 Revenue Proposals” dated February 2012). (This suggests that the new proposed regulations may include many of the items that were being considered eight years ago. The Treasury presumably suggested the §2704 legislative project to the Obama administration to support the provisions that it wanted to include in its new regulations.)

The §2704 legislative proposal in the Greenbooks for the Obama administration, ending with the 2013 Fiscal Year Greenbook, includes five items. The new §2704 regulation may include some or all of these subjects.

a. Additional “Disregarded Restrictions.” – An additional category of restrictions (“disregarded restrictions,” which are in addition to the liquidation restrictions addressed in §2704) may be disregarded in determining the value of interests in “family-controlled entities” (observe, this is not limited just to partnerships and LLCs) that are transferred to family members. What are those additional restrictions? They are “to be specified in regulations.” Transferred interests would be valued by substituting for “disregarded restrictions certain assumptions to be specified in regulations. Disregarded restrictions would include limitations on a holder’s right to liquidate that holder’s interest that are more restrictive than a standard to be identified in regulations.”

b. Assignee Interests. – Restrictions on a transferee being able to become a full-fledged partner (or member of an LLC) would be a disregarded restriction.

c. Third Party Involvement in Removing Restrictions. – Section 2704(b)(2)(B)(ii) says that one of the general requirements of an “applicable restriction” is that the transferor or family members can remove the restriction. (The Greenbook proposal generally retains this family-removal requirement with respect to “disregarded restrictions.”) The Fifth Circuit in the Kerr case reasoned that §2704 did not apply to the partnership in that case because charities had small limited partnership interests, and all partners had to consent to removing restrictions; thus, the family acting alone could not remove the restrictions. Kerr v. Commissioner, 292 F.3d 490 (5th 2002). Under the legislative proposal, “certain interests (to be identified in regulations) held by charities or others who are not family members of the transferor would be deemed to be held by the family.”

d. Safe Harbor. – The statute would provide regulation authority that would include “the ability to create safe harbors to permit taxpayers to draft the governing documents of a family-controlled entity so as to avoid the application of section 2704 if certain standards are met.”

e. Marital and Charitable Deduction. – The legislation would include provisions dealing with the interaction of the marital and charitable deductions for transfer tax purposes. Therefore, if an interest is valued higher than its actual fair market value for transfer tax purposes, the higher value might also be applied for marital deduction and charitable deduction purposes (a taxpayer-friendly provision).

To view the legislative proposal that was included in the President’s budget proposals for fiscal years 2010-2013, click here.

VI. EFFECTIVE DATE

Treasury regulations are typically effective on the date final regulations are issued. At least several years typically lapse from the time proposed regulations are issued until the regulations are finalized. In very limited situations, proposed regulations provide they will be effective when finalized retroactive back to the date of the proposed regulations. For example, the proposed regulations regarding the income tax effects of private annuities issued in 2006 take that approach (and interestingly, those regulations still have not been finalized, nine years after the proposed regulations were issued, see REG-141901-05k proposing changes to Reg. §§1.72-6(e) & 1.100(j)). The initial “anti-Kohler” proposed regulations that were issued in 2008 also took that “retroactive effect” approach, but the revised proposed regulation issued in 2011 dropped that harsh effective date provision. See Prop. Treas. Reg. §20.2032-1(f). Cathy Hughes suggested at the ABA Tax Section meeting that the Treasury and IRS are still considering what should be the appropriate effective date of the proposed regulation.

VII. LEGISLATIVE HISTORY

Some planners have expressed concern that the proposed regulation may limit the availability of minority and marketability discounts for transfers involving family-controlled entities. See Freda, Guidance on Material Participation for Trusts, Estates May Emerge in Stages, BNA Daily Tax Report (May 12, 2015) (summarizing comments of Richard Dees). The legislative history (the 1990 Conference Report) makes clear that Chapter 14 was not intended to “affect minority discounts or other discounts available under [former] law.” The Senate’s discussion of the former law and the impact of Chapter 14 is rather emphatic.

“The value of property transferred by gift or includable in the decedent’s gross estate generally is its fair market value at the time of the gift or death. Fair market value is the price at which the property would change hands between a willing buyer and willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts (Treas. Reg. sec. 20.2031-1(b)). This standard looks to the value of the property to a hypothetical seller and buyer, not the actual parties to the transfer. Accordingly, courts generally have refused to consider familiar relationships among co-owners in valuing property. For example, courts allow corporate stock to be discounted to reflect minority ownership even when related persons together own most or all of the underlying stock.

The bill does not affect minority discounts or other discounts available under present law.

The bill does not affect the valuation of a gift of a partnership interest if all interests in the partnership share equally in all items of income, deduction, loss, and gain in the same proportion (i.e., straight-up allocations).” (136 Cong. Rec. § 15679, 15681 (October 18, 1990) (emphasis added)).”

Perhaps the existence of this legislative history is the reason that the IRS, beginning in 2009, sought legislative changes to §2704 before issuing its new proposed regulations.

To download this report, please click here.

Tax Court Approves the Mother of All Crummey Trusts with 60 Beneficiaries, Part I
by Ed Morrow and Alan Gassman

In April, we featured a LISI Newsletter article by Jonathan Gopman and others on the case of Mikel v. Commissioner, which you can view by clicking here. Last month, Ed Morrow and Alan Gassman published a follow-up LISI article on the case, which is featured below:

EXECUTIVE SUMMARY:

In the Tax Court Memorandum decision of Mikel v. Commissioner, Judge Lauber wrote a very well-reasoned opinion on summary judgment, that $1,440,000 of gifted property valued at $3,262,000 qualified for the gift tax annual exclusion, based on 60 beneficiaries having withdrawal rights of $24,000 each (the annual exclusion was $12,000 per year per donor at the time of gift). The Court ruled in favor of the Mikels despite the facts that the property was apparently illiquid, many of the beneficiaries were either minors or spouses of the immediate family, and the trust contained an ambiguous forfeiture clause and included a complicated provision for a religious arbitration panel.

This decision is contrary to a prior IRS Chief Counsel Memorandum issued in 2012 and continues a long line of defeats suffered by the IRS in this area. It gives encouragement to practitioners to maximize the use of Crummey trusts, not only for taxpayers with taxable estates, but also for those with non-taxable estates who can use such trusts for income tax and asset protection reasons. Conversely, it will give further ammunition to current Administration’s “Greenbook” proposals that limit such annual exclusion gifts to $50,000 per donor – no matter how many donees.

Ambiguities in the trust document gave the IRS a colorable argument that both the discretionary distribution language and the in terrorem clause would prevent beneficiaries from being able to exercise their withdrawal power. Judge Lauber referred to the trust language as being “not a paragon of draftsmanship,” as a reminder to us all that trust language should be as article and straightforward as possible.

While this case is instructive on a number of interesting issues, it must be stressed that it is merely a memorandum rather than a full Tax Court opinion. However, this merely indicates that the Tax Court considered any legal issues to be well-established and well-settled. After forty-seven years of attacking Crummey trusts, one would hope that the IRS will finally take the hint.

FACTS:

The Mikels, husband and wife, gifted three properties in Brooklyn and one in Florida to an irrevocable trust in 2007, with a total value of $3,262,000, the value of one property reported as “on the 2007/2008 New York City Real Property Tax Assessment Rolls” – which apparently the IRS did not contest. The trust contained a fairly standard “Crummey” provision which:

  • Granted each beneficiary the right to withdraw property, including the property transferred, by pro rata formula, limited to “the maximum federal gift tax exclusion under 2503(b),” which was $12,000 at the time;
  • Required the trustee to give notice of the withdrawal right to all beneficiaries or their guardians within a reasonable time;
  • Required the trustee to “immediately distribute to such beneficiary or guardian the property allocable to them, free of trust;”
  • Caused the withdrawal right to lapse if not exercised in writing within 30 days of receipt of such notice;
  • Permitted the trustee to distribute cash or property or borrow to satisfy any demand right;
  • Included a savings/construction clause outlining the settlors’ intent to qualify for the federal gift tax annual exclusion;
  • Permitted the trustee to exclude beneficiary withdrawal rights with respect to future contributions of property.

All points except the last one above are common to nearly every Crummey trust drafted since 1968 when the Crummey case was decided. However, the last provision is usually an option left with the settlors rather than the trustee, but we know of no reason that a trustee could not be given the power to deny withdrawal power rights to certain beneficiaries if (and only if) announced by the trustee before gifts that would otherwise be subject to the withdrawal powers are made. It is unclear whether the trust had “hanging powers” as it was not discussed in the case. The attorney and trustee both signed uncontested affidavits that notices were sent four months after funding to each beneficiary/guardian pursuant to the trust. Neither the Tax Court nor the IRS argued that this four month delay was unreasonable, and the actual notice was not an issue for the Court.

The trust agreement was read to specifically state that a beneficiary’s withdrawal power began immediately upon initial funding of the trust, but did not close until thirty days after written notice was received that the power existed. In order to obtain the benefits of the annual gift tax exclusion, drafters should be especially careful that they allow for the withdrawal power to begin at the moment of contribution, so that it is considered to be a “present” and not future interest. We discuss below whether the withdrawal power should close within a certain period of time after the contribution, or stay open until a certain period of time after written notice is given.

The interesting twist that probably caused the IRS to challenge the Crummey powers involved the somewhat ambiguous language that provided for an arbitration panel to preside over trust disputes and an in terrorem clause. The trust required a beneficiary to submit any dispute that might arise over interpretation of the trust to a beth din, which is Hebrew for an arbitration panel comprised of three Orthodox Jewish persons. If the beth din issued an adverse ruling, the beneficiary could go to state court. You would think this would be a positive factor to the IRS, based on their arguments in prior memoranda, to ensure an enforceable right, but the government argued that exercising this right would trigger an in terrorem clause, causing the beneficiary to forfeit all rights in the trust. If true, this would undercut any claim that the beneficiary had a “present interest” in the withdrawal right and make any such present interest “illusory.” Let’s review the actual clause:

In the event a beneficiary of the Trust shall directly or indirectly institute, conduct, or in any manner take part in or aid in any proceeding to oppose the distribution of the Trust Estate, or files any action in a court of law, or challenges any distribution set forth in this Trust in any court, arbitration panel or any other manner, then in such event the provision herein made for such beneficiary shall thereupon be revoked and such beneficiary shall be excluded from any participation in the Trust Estate.

The Tax Court disagreed with the IRS interpretation of the in terrorem clause, finding that the clause would only bar a beneficiary from enjoying benefits of the trust if he/she files suit to challenge distributions of trust property to another beneficiary, not mandatory ones triggered by a “Crummey” withdrawal request. Because the trust document required the trustee to comply with a beneficiary’s exercise of a Crummey withdrawal right, requiring the beth din to follow both state law and the in terrorem clause did not impair a Crummey withdrawal right. Meaning, $1.44 million of the trust qualified for the annual gift tax exclusion.

The court noted trust language to the effect that the intent of the withdrawal power provision was to qualify for the annual exclusion. Furthermore, the Court constructed the trust such that the trustee’s discretion to distribute some or all of the assets to less than all of the beneficiaries could not be exercised in a way that would deprive any beneficiaries of their withdrawal power. Based upon our reading of the trust agreement, this could have gone the other way.

Stay tuned next week for our commentary on this case!

Richard Connolly’s World
Asset Protection in a Digital World

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with a link to the articles.

This week, the first article of interest is “Digitally Storing Family Wealth” by Robert Milburn. This article was featured in Barron’s on February 17, 2015.

Richard’s description is as follows:

Private bankers and family office executives are rushing to upgrade their cyber security systems, after multi-billion dollar companies like Sony Pictures Entertainment, Target, and Home Depot have been hacked. Some wealth managers are spending millions of dollars per year to beef up so-called “digital vaults” that securely store their client’s confidential information, like tax returns and wills. These online safety-deposit boxes also keep track of their clients’ complex web of online brokerage, retirement, and bank accounts and their passwords – so next-gen heirs can get access, should a parent unexpectedly die.

As reassuring as that sounds, it still might not be a good enough system. To stay ahead of the slowly-evolving legislation at the state level, private bankers are advising clients they dictate in their wills precisely which heirs or trustees have access to which online accounts. That’s because a number of court cases have emerged in which surviving family members were posthumously denied access to a loved one’s online accounts.

Please click here to read this article in its entirety.

The second article of interest this week is entitled “Estate Planning for Digital Assets” by Austin Kilham. It was featured in The Wall Street Journal on May 11, 2015.

Richard’s description is as follows:

After working with an estate lawyer on plans for one client’s digital assets, Minnesota-based adviser Kelly Pedersen says she now recommends to all her clients that they adopt a similar approach. It calls for empowering a trustee to modify, control, archive, transfer, and delete all digital assets, and it defines where those assets might be stored, including on the client’s computer and other devices or in the cloud.

Please click here to read this article in its entirety.

Thoughtful Corner
Success Tips for First Year Lawyers, Part II

Alan Gassman recently gave a five hour workshop on professional acceleration for a group of LL.M. in tax law students and some practicing lawyers at the University of Florida on Saturday, May 30, 2015. Last week, we shared some of Alan’s new tips for first year lawyers. To see the first eight tips, please click here.

This week, we continue with more of Alan’s tips, which read as follows:

9.)       Always accept new work willingly and enthusiastically, but never restrain from mentioning that you will need to have it prioritized if there are other things that may not be done on time. The assignor is possibly not aware of what the new work might delay.

10.)     Consider always having a list of tasks in progress with an extra copy that you can hand to your supervising lawyer and go over whenever they might ask.

11.)     Ask for periodic feedback. In particular, ask, “What would you like for me to change in the way that I am doing things to improve your use of me and my productivity for the firm?”

12.)     Always sincerely compliment as many people as you can as often as you can within the firm and outside the firm. What goes around comes around, and you need all of the good karma you can get!

13.)     Draw up charts whenever you can to simplify matters, for purposes of memory, and for purposes of explanation. Charts with squares, circles, and lines can help significantly towards Confucius’s observation that a picture is worth a thousand words. Learn how to make charts in Excel and bring charts to meetings whenever you can with all key information that needs to be remembered for each particular client.

14.)     Consider carrying a Dictaphone with you at all times, and offer to record any instructions or explanations that anyone is giving you to help make sure you get it right later. This allows people to talk faster and to provide you with assignments quickly, knowing that you will review every word of what they have said.

15.)     Enter your time contemporaneously onto a written time slip and/or computer, and make sure all your time is entered by the end of each day. Enter all time, including time you have wasted. Make separate entries for time that you know is billable and the time that you think may be reduced or not billed for at all. Let the senior lawyer make this final decision; there may be more usable time than you think.

Firms expect to write a lot of time off, and if you are spending significantly more time than they expect, it is good for you to know and for them to know earlier rather than later.

You can have brief discussions from time to time when you feel that your wheels have been spinning or that you have wasted a lot of time. Use an apologetic tone. This is part of the mentoring process. The senior lawyers in your firm also write off a lot of time. It is a lifelong experience of an attorney to do so, so do not be bashful about it.

16.)     Have the time of your life!  Find what you like best about the practice of law and do that as much as you can, while ever improving and endeavoring to make 85% or more of your time in the office thoroughly enjoyable and satisfying.  If you can do this, there is no doubt that you will have every success in your career, not to mention your personal life.  Your wallet will thank you also!

Stay tuned for more tips for first year success next week. Alan’s next scheduled workshop for law students and professionals will be on Saturday, August 22, 2015, at Ave Maria Law School in Naples.  Schedule your tax deductible weekend in Naples, and attend this Saturday eight hour interactive workshop, while making new friends and helping others (and yourself) immensely.  Spouses are invited as well.  A splendid time is guaranteed for all, not to mention one ethics credit hour and seven general credits.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

IN POLITICAL NEWS:
By Ron Ross

Because of the unusually high number of candidates in this election season, the battleground state of Iowa has been forced to find an alternative to the Ames Straw Poll. In order to narrow the field, candidates will instead be forced to find their way out of an authentic Iowa corn maze. Only the survivors will be allowed to participate in the Iowa caucus, the first event of the election season that actually awards delegates.

Maze

Perhaps because of this new development, another challenger had declared her candidacy for President: Ms. Pac Man.

*****************************

On the Democratic side of our national politics, Rhode Island Governor Lincoln Chafee has thrown his hat into the Presidential race as well. The Lincoln Chafee for President theme song is reproduced below:

Lincoln Chafee, man of the people;
He stands 183 centimeters high;
He weighs about 75 kilograms;
You can’t measure how much we love this guy!

His wife Stephanie is 170 centimeters;
The perfect mother, the perfect bride.
They’re from Rhode Island, the smallest state;
Seventy-seven kilometers tall, 60 kilometers wide

Americans who love the metric system
Will rally together and follow his path;
If everyone who ever did a gram votes for him,
He’ll be elected president (do the math!)

*****************************

NOTICE TO EMPLOYEES OF GASSMAN, CROTTY & DENICOLO, P.A.

In response to the numerous complaints regarding theft from the office refrigerator, we have called in the FDLE – The Florida Department of Lunch Enforcement.

Fridge

Officers will find the guilty party by putting each of you in the refrigerator and see if the lights goes out.

Remember, you have the right to an attorney!

Upcoming Seminars and Webinars

LIVE WEBINAR:

Alan Gassman will present a live, free, 30-minute webinar on the topic of THE NEW DOCTOR’S GUIDE TO WEALTH BUILDING, CREDITOR PROTECTION, TRUST PLANNING, AND WHAT THEY DIDN’T TELL YOU IN MEDICAL SCHOOL. There will be two opportunities to attend this presentation.

Date:   Wednesday, June 17, 2015 | 7:30 PM or Saturday, June 20, 2015 | 9:30 AM

Location: Online webinar

Additional Information: To register for the Wednesday/7:30 PM webinar, please click here. To register for the Saturday/9:30 AM webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

***********************************************************

LIVE BLOOMBERG BNA WEBINAR:

Alan Gassman, Christopher Denicolo, Jerome Hesch, and Stephen Breitstone will present a Bloomberg BNA Webinar on CREATIVE TAX PLANNING FOR REAL ESTATE TRANSACTIONS AND INVESTORS: A PRACTICAL GUIDE FOR REAL ESTATE AND TAX ADVISORS AND THEIR CLIENTS.

Date: Tuesday, June 23, 2015

Location: Online webinar

Additional Information: To register for this webinar, please click here. For more information, please email agassman@gassmanpa.com.

********************************************************

LIVE WEBINAR:

Alan Gassman and noted trust and estate litigator, LL.M in estate planning, and blog master Juan Antunez, J.D., LL.M. will present a free 30-minute webinar on HOW AND WHEN TO USE ARBITRATION CLAUSES FOR TRUSTS AND WILLS. 

Don’t miss Juan’s wonderful blog site entitled Florida Probate & Trust Litigation Blog, which can be accessed by clicking here, and the many very useful articles thereon.

Date: Thursday, June 25, 2015 | 12:30 PM

Location: Online webinar

Additional Information: To register for this webinar, please click here.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on FINANCIAL RELATIONSHIPS WITH PATIENTS, CO-PAYMENTS, GIFTS, AND GRAFT – HOW TO STAY OUT OF TROUBLE UNDER FLORIDA AND FEDERAL LAW.

This is an essential guide for medical practices and those who advise them. There will be two opportunities to attend this presentation.

Date: Tuesday, July 7, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email Alan Gassman at agassman@gassmanpa.com.

***********************************************

LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR:

Alan Gassman will present a webinar on the topic of WHAT FLORIDA CPAS NEED TO KNOW ABOUT ASSET PROTECTION for the Florida Institute of CPAs.

More information about this webinar will be forthcoming. Please stay tuned!

Date: Thursday, July 9, 2015 | 9:30 AM – 10:30 AM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com. To register, please contact Thelma Givens at givenst@ficpa.org.

**************************************************

LIVE ORLANDO PRESENTATION:

ORLANDO BUSINESS AND PROFESSIONAL PRACTICE OWNER SYMPOSIUM – PRIVATE EVENT OPEN ONLY TO CLIENTS OF MAUI MASTERMIND AND GASSMAN, CROTTY & DENICOLO, P.A.

Alan S. Gassman, business coach and author David Finkel, and others will present a two-day conference for high-net-worth business and professional practice owners sponsored by Maui Mastermind®.

Alan’s topics will include BASIC AND ADVANCED PLANNING TECHNIQUES FOR THE PROTECTION OF WEALTH, THE 10 BIGGEST MISTAKES THAT BUSINESS OWNERS AND PROFESSIONALS MAKE, and ESTATE TAX AVOIDANCE TECHNIQUES FOR BUSINESS OWNERS AND PROFESSIONALS.

Other topics include A Proven Map to Grow Your Business and Get Your Life Back, Building Wealth Outside of Your Company, Tax Reduction Strategies, and Understanding How Investments Work and What They Cost.

Interested individuals can contact agassman@gassmanpa.com or David Finkel at david@mauimastermind.com.

Date: July 30th and 31st, 2015

Location: Hyatt Regency Orlando | 9801 International Drive, Orlando, FL 32819

Additional Information: To register, please click here or email agassman@gassmanpa.com.

********************************************

LIVE WEBINAR:

Alan Gassman and Christopher Denicolo will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON, FLORIDA PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

This 50 minute informative talk with extensive materials will cover essential aspects and trip-ups that doctors often encounter in the area of personal and practice entity asset protection. It will also discuss tax and investment planning, advisor selection, health law, compliance, and other areas of interest for physicians.

Each attendee will receive a complimentary copy of Mr. Gassman’s book, Creditor Protection for Florida Physicians and other valuable materials.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Cost of attendance is $35.00. If you are a student or alumni of Ave Maria School of Law, the cost of attendance is $20.00.

Delicious lunch, snacks and amazing conversations included!

CLICK HERE TO REGISTER

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

Quotes from previous workshops:

Alan Gassman’s Professional Acceleration Workshop was a fast-paced, information-packed, and highly instructional event.  Through interactive discussions of time-tested professional and personal growth strategies ranging from goal setting and problem solving to office efficiency and effective team building, Alan provides a thoughtful and measured approach to becoming a highly effective professional.  I left the workshop feeling invigorated and excited to implement the insights into my practice management and continued self-study.  The course materials and Alan’s compilation of trusted additional resources will be an invaluable resource for years to come.  Thank you for the opportunity to participate.

Christina Rankin, J.D., LL.M. (Taxation)
Trust and Estates Lawyer with Over 10 Years of Experience
Law Offices of Richard D. Green, J.D., LL.M.

I was fortunate to attend the Law Practice and Professional Development Workshop conducted by Alan Gassman, Esq. in Clearwater, Florida on August 3, 2014.  The Workshop covered a wide range of topics from Goal Setting and Gratitude to as practical a topic as law office logistics.  Alan’s approach was intimate, self-revelatory and highly instructive.  I have been practicing law for 20 years and have never attended a program as broad ranging, practical and encouraging.  The depth of Alan’s thought and experience is obvious in the materials and in the ease with which he led the discussions.  This was not a dull lecture but a highly engaging workshop that was over before you expected it to be.

Daniel Medina, B.C.S
Board Certified in Wills, Trusts and Estates
Medina Law Group, P.A.

I am super charged from the workshop.  I have already started to work towards my written goals and my subconscious has me waking up almost 2 hours earlier ready to start my day – one of my goals!  It really works.  I am very grateful to be a part of this and part of your professional community.  All of this came from a New Year’s resolution last year – I was determined to reach out to professionals I admired even if I felt silly.  I wrote you an email when you were in the Galapagos with Marcia & you responded!  I was amazed.  I had no idea how that email would change my life.  Thanks for everything you do and all the ways you help me develop professionally and personally.

Debbie Faulkner, J.D., LL.M. (Taxation)
The Faulkner Firm, P.A.

I want to personally thank you again for providing me with the unbelievable opportunity to attend your professional acceleration workshop.  I came away from your workshop with renewed excitement in improving my practice.  While I had long let go of the notion that doing things the old way was the only way, I found myself mentally making changes in nearly every area of my practice.  There were added bonuses that are intangible and difficult to articulate.  I love what I do, but to be able to do it better, more efficiently, add to my bottom line and, all the while, allow me to have more personal time available in a 60-plus hour week, was truly unexpected.  Simply implementing half a dozen of the changes I developed throughout the day as a result of your program will not only enhance the bottom line, but make my days innumerably easier.  Thank you so much for giving your time to help other professionals with personal and professional growth.

Hamden H. Baskin, III, J.D., LL.M. (Taxation)
AV Rated, Estates and Trust Litigation Lawyer with Over 35 Years of Experience
Baskin Fleece Attorneys at Law

By having the opportunity to discuss my goals and the obstacles keeping me from achieving those goals with other professionals I was able to define my path to achieve those goals like never before.  Not only was I able to improve myself personally, but I also had the unexpected opportunity of being able to have very candid discussions about law practice management and what actually works and doesn’t work with experienced lawyers who provided great advice for me as a new lawyer entering the field.

The entire experience was invaluable and far more than what I thought it may be. I am very much looking forward to our next session to continue to develop as a young lawyer both personally and professionally.

Brandon Ketron, CPA, Stetson Law Student

Course materials are available on Amazon.com for $1.99 and can be found by clicking here.

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To register for this event, please click here. For more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

****************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on a topic to be determined. We are open to suggestions!

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

*****************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

*************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

****************************************************

LIVE WEBINAR:

Alan Gassman will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

*******************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, Alan Gassman, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning. Alan Gassman will speak on Florida Law Tricks and Traps for Estate Planners.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins, which is not affiliated with Anthony Hopkins.

Please provide us with your input for other topics for this year and next! Watch this space for more speaker and topic announcements.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)
 

LIVE ORLANDO PRESENTATION: 

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING 

Date: January 11 – January 15, 2016 

Location: To be announced 

Additional Information: Information on the 50th Annual Heckerling Institute on Estate Planning will be available on August 1, 2015. To learn about past Heckerling programs, please visit http://www.law.miami.edu/heckerling/. 

Applicable Federal Rates 

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

April Applicable Rates

The Thursday Report – 6.4.15 – Annie Get Your Thursday Report!

Posted on: June 4th, 2015

Gun Trust Questions & Answers – Explosive Coverage that Cannot be Silenced!

Are You Using the Right Durable Power of Attorney Forms?

Avoiding the Castellano Error by Always Leaving Assets in Trust, Not Outright, Part III

Richard Connolly’s World – Health Law & Estate Planning

Thoughtful Corner – Success Tips for First Year Lawyers

Humor! (or Lack Thereof!)

We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Stephanie at stephanie@gassmanpa.com.

This report and other Thursday Reports can be found on our website at www.gassmanlaw.com.

Gun Trust Questions & Answers
Explosive Coverage that Cannot be Silenced!

We hope you haven’t yet gotten dis-gun-sted with our gun trust materials. It really helps to have an audience as we gear up for our upcoming webinar with Jonathan Blattmachr, Lee-Ford Tritt, and Sean Healy, so set your sights on this!

1.     Why are Gun Trusts So Complicated?

Gun trusts can pose significant problems for all parties involved. Not only must trustees and beneficiaries comply with state laws for creating and properly maintaining a trust, but the gun trust must also address the various and equally complicated state and federal laws on gun ownership, as well as what happens to the trust property upon the death of the grantor. To gain a better understanding of just how complicated they can be, take a look at the following questions.

2.     What is the National Firearms Act and Gun Control Act?

The National Firearms Act (NFA) and Gun Control Act (GCA) were enacted to restrict who may possess, buy, and sell certain restricted firearms and firearm accessories. The NFA operates primarily as a taxing statute by imposing a $200 statutory excise tax per item. It also requires the person to register all restricted firearms with the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

The GCA, on the other hand, was enacted to restrict the transfer of certain types of firearms between individuals. The GCA places weapons into two categories, and each has different rules. Title I firearms primarily include long rifles, shotguns, and handguns. Title II firearms include automatic machine guns, short-barreled rifles, sawed-off shotguns, suppressors (silencers), and destructive devices such as: grenades, bombs, explosive missiles, and poison gas weapons.

Together, the NFA and GCA impose various restrictions on the rights of gun owners to possess and transfer certain weapons.

3.     Why Use a Gun Trust When I Can Simply Register NFA Firearms as an Individual or Corporation?

A gun trust is the most comprehensive method to protect yourself and other individuals who you want to allow use or possession of NFA firearms. With a gun trust, the grantor can name as many trustees as they want to use and possess NFA firearms. A gun trust also allows you to properly pass those firearms to future beneficiaries, protecting them from criminal prosecution.

On the other hand, when a person registers an NFA firearm as an individual, they must satisfy several requirements, and even after that, it is not guaranteed they will be approved. Corporations, such as an LLC are usually easy to set up but do not offer the same estate planning tools that a gun trust does. Further, if you fail to pay the annual filing fee, the Secretary of State can dissolve the corporation, leaving you and its members in the unlawful possession of unregistered NFA firearms.

The chart below sums up the various requirements for registering a firearm as an individual, corporation, and gun trust.

Gun Trust Chart

4.     Can I Use Software like Quicken Will and Trust Maker?

While nothing is technically going to keep you from using products such as this, you should realize that they are not designed to address the complex issues involved with creating a gun trust. Substituting a generic trust form for a gun trust can also be dangerous, as they do not typically address the applicable federal and state laws.

Generic forms tend to be very simple and tend to only address how an individual’s property will pass on after death. A gun trust should have specific language on how the firearms will be managed during the grantor’s life and direct who they will pass to after death. Important consideration must be given as to who will qualify as a co-trustee and beneficiary and whether they will be permitted by law to use and possess firearms.

Furthermore, the trust must be structured to ensure that, at no time, the sole trustee is also the sole beneficiary. Otherwise, the doctrine of merger would invalidate the trust, leaving that person in the unlawful possession of unregistered firearms.

Unlike a generic trust, a gun trust should also include provisions that address what happens to the trust property if a grantor, trustee, or beneficiary becomes a prohibited person who is unable to use or possess any type of firearm. Typically, the gun trust will automatically disqualify them from any rights they had from the trust agreement, thus protecting all the other trustees from an illegal transfer of possession.

5.     Who May Access the Firearms Held by the Gun Trust?

The grantor can add as many or as few trustees as they want. Note that all trustees will have specific duties and obligations to perform pursuant to the trust’s provisions. In some states, trustees must be at least 18 years old to possess the firearms held by the trust, and in others, they must be at least 21 years old. However, in order to purchase firearms for the trust, trustees must always be at least 21 years old.

6.     What Role Do Beneficiaries Play?

As is the case with other trusts, a beneficiary is the individual entitled to the benefits of that trust. For a gun trust, that means the firearms are held under the trust for their benefit. There is no age requirement for beneficiaries, and they typically include the grantor’s minor children, if any. However, the gun trust should address the potential scenario where the grantor dies and leaves the trust property to their minor child. In this instance, there would be someone under the age of 18 in possession of restricted firearms, which is unlawful. Thus, a provision should be included that will allow the trustees to use and possess the trust property until the beneficiaries are old enough and mature enough to inherit the trust property.

Finally, it is important to note that while the law remains unclear, most conservative attorneys conclude that beneficiaries cannot solely use or possess NFA firearms owned by the gun trust outside the presence of at least one trustee. Thus, an individual who is only a beneficiary, as opposed to a trustee and beneficiary, cannot safely be in sole possession of the NFA firearm, regardless of their age. However, other attorneys are willing to take a chance in allowing beneficiaries to be in sole possession of NFA firearms by including language in the gun trust document that allows a trustee to appoint an individual as a temporary trustee so that they may lawfully use and possess NFA firearms.[1] The appointed trustee’s trusteeship will end when the firearms are returned to the permanent trustee of the gun trust.[2]

7.     What Must You Submit to the Bureau of Alcohol, Tobacco, Firearms, and Explosives When Registering and Transferring Firearms to the Trust?

First, when purchasing firearms or related items, the trust should be named as the purchaser, not the grantor or trustee. Furthermore, at the time of purchase, the trustee should submit the application form to the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The most common forms include Form 1 fore firearm manufacturing, Form 4 for the taxable transfer of a firearm, Form 5 for a tax exempt firearm transfer, and Form 20 for the interstate transport of an NFA firearm.

You are also required to submit a complete copy of the gun trust document, any schedules or attachments referenced in the trust, and proof that each “responsible person” is entitled to possess firearms via a Certificate of Compliance. The last item that should be sent is a check or money order payable to the BATFE for $200.

8.     I am Single. Should I Even Bother Setting Up a Gun Trust?

Presently, you may feel that it is unnecessary to establish a gun trust to hold NFA firearms just for yourself. However, doing so now will provide you with the flexibility to amend the trust during your lifetime so that you may add or remove additional trustees and beneficiaries as the occasion arises. While you may not have a spouse or children right now, that may not be the case in the future.

Furthermore, keep in mind that individuals purchasing NFA firearms must still pay the $200 tax stamp. Later on, if you wish to set up a gun trust so that you can lawfully pass your NFA firearms to friends and family, you must pay an additional $200 tax stamp for each weapon transferred to a trust.

9.     Who are Considered to be Prohibited Persons, and Can They be a Trustee?

A prohibited person cannot be a trustee of a gun trust. Furthermore, they are precluded from directly owning, purchasing, shipping, or transferring any type of firearm. The trustees of a gun trust must also ensure that they do not inadvertently transfer firearms held by the gun trust to these individuals. The following is a list of those individuals that are deemed to be prohibited persons:

  1. Any person who has been convicted in any court of a crime punishable by imprisonment for a term greater than one year;
  2. Any fugitive from justice;
  3. Any unlawful user of or any person who is addicted to a controlled substance;
  4. Any person who has been adjudicated as having a mental defect or who has been committed to a mental institution;
  5. Any alien who is illegally or unlawfully in the United States or, except as provided in 18 U.S.C. 922 (y)(2), has been admitted to the United States under a non-immigrant visa (as that term is defined in 8 U.S.C. 1101(a)(26));
  6. Any person who has been discharged from the Armed Forces under dishonorable conditions;
  7. Any person who, having been a US citizen, has renounced his or her citizenship;
  8. Any person who is subject to a restraining order; and
  9. Any person who has been convicted of a crime of domestic violence.

10.    If a Currently Own NFA Firearms, May I Transfer Them into the Gun Trust Without Paying the Transfer Tax?

No, this type of transaction will require a $200 tax stamp for each firearm transferred.

11.    Can I Add an Individual as a Trustee of the Gun Trust if They Live in a State Where NFA Firearms are Illegal?

Yes. However, in this situation, the trustee will not be able to use or possess the NFA firearms within that state. They will only be able to use and possess them in those states that permit NFA firearms and items. Furthermore, if the trustee lives in a state that imposes additional restrictions on the use and possession of NFA firearms that are different than what the State of Florida requires, then they must also comply with those additional requirements. For example, the trustee’s state may require them to obtain a Firearms Identification Card before they can lawfully purchase or possess firearms.

12.    Can my Friends and I Form a Gun Trust and Put NFA Firearms into the Trust?

Legally, there is nothing that will prevent someone from forming a trust in this manner. However, each friend must be aware of the potential consequences of sharing a gun trust. Most importantly, what happens to the trust property if the friendship ends?

**********************************************
[1] http://nwgunlawgroup.com/can-a-beneficiary-be-in-sole-possession-of-an-nfa-firearm
[2] http://nwgunlawgroup.com/beneficiary-in-sole-possession-issue-solved

Are You Using the Right Durable
Power of Attorney Forms?

Many post-September 2011 Durable Powers of Attorney are inadvertently inadequate because every single enumerated authority listed under the statute has to be signed or initialed, and initialing or signing once to indicate that all of them count together is insufficient.  Just about every bookstore we have checked with has forms that do not comply with the statute and will cause significant harm to Floridians who use them.

Florida Statute 709.2202(1) provides that certain authorities can only be provided to an Agent under a Durable Power of Attorney if the principal signed or initialed next to each specific enumeration of authority.

Certain forms are being used by lawyers which provide for the principal to “initial here only if you want every power to apply.” This is an invitation to disaster.

Please get the word out so that those friends and colleagues can get back to their clients to tell them to come back in and re-sign after initialing each power individually.

The statute reads as follows:

709.2202 Authority that requires separate signed enumeration –

(1) Notwithstanding s. 709.2201, an agent may exercise the following authority only if the principal signed or initialed next to each specific enumeration of the authority, the exercise of the authority is consistent with the agent’s duties under s. 709.2114, and the exercise is not otherwise prohibited by another agreement or instrument:

(a) Create an inter vivos trust;

(b) With respect to a trust created by or on behalf of the principal, amend, modify, revoke, or terminate the trust, but only if the trust instrument explicitly provides for amendment, modification, revocation, or termination by the settlor’s agent;

(c) Make a gift, subject to subsection (3);

(d) Create or change rights of survivorship;

(e) Create or change a beneficiary designation;

(f) Waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan; or

(g) Disclaim property and powers of appointment

Our book, Florida Law for Tax, Business, and Financial Advisors, provides further information and Durable Power of Attorney forms. You can purchase and/or take advantage of a free look inside the book by clicking here.

Avoiding the Castellano Error by Always Leaving
Assets in Trust, Not Outright, Part III

by Jonathan E. Gopman, Ryan J. Beadle, Michael A. Sneeringer,
Evan R. Kaufman, and Alan S. Gassman

Under the Castellano decision, a Will which provided that the inheritance of an insolvent beneficiary would instead be held in trust, was essentially set aside by a bankruptcy judge under the rationale that the beneficiary’s notification to the Trustee of insolvency constituted a fraudulent transfer into the trust system.

Click here to view Part I of this article. Click here to view Part II.

This article has also been published as a LISI Newsletter, which can be viewed by clicking here.

GOING FORWARD

Although Castellano I has been overruled, there remain practical lessons from Castellano II of which estate planning practitioners should be aware.

Spendthrift Provision Language

It is always better for asset protection purposes that family wealth is passed in wholly discretionary trusts for as long as possible under applicable law. If assets must be distributed outright to a trust beneficiary, practitioners may wish to draft the trust to clearly provide that such beneficiary will have no right to such distributions until the end of the trust administration or estate administration process. Additionally, practitioners may wish to give either an independent trustee or trust protector discretion over the timing of such distributions and the ability to withhold such distributions if such fiduciary is aware of creditor issues affecting the potential distributee. In those states that have adopted §504 of the Uniform Trust Code (“UTC”) or an equivalent provision, if the client insists upon the beneficiary serving as the trustee, a lifetime spendthrift trust is still possible. Such a trust would include an ascertainable standard for distributions.

Section 504 of the UTC provides:

(A) In this section, “child” includes any person for whom an order or judgment for child support has been entered in this or another State.

(B) Except as otherwise provided in the subsection (c), whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee’s discretion, even if:

  1. The discretion is expressed in the form of a standard of distribution; or
  2. The trustee has abused the discretion.

(C) To the extent a trustee has not complied with a standard of distribution or has abused a discretion:

  1. A distribution may be ordered by the court to satisfy a judgment or court order against the beneficiary for support or maintenance of the beneficiary’s child, spouse, or former spouse; and
  2. The court shall direct the trustee to pay to the child, spouse, or former spouse such amount as is equitable under the circumstances but not more than the amount the trustee would have been required to distribute to or for the benefit of the beneficiary had the trustee complied with the standard or not abused the discretion.

(D) This section does not limit the right of a beneficiary to maintain a judicial proceeding against a trustee for an abuse of discretion or failure to comply with a standard for distribution.

(E) If the trustee’s or co-trustee’s discretion to make distributions for the trustee’s or co-trustee’s own benefit is limited by an ascertainable standard, a creditor may not reach or compel distribution of the beneficial interest except to the extent the interest would be subject to the creditor’s claim were the beneficiary not acting as trustee or co-trustee.

Practitioners should carefully consider applicable state law in drafting spendthrift provisions. The spendthrift clause in the Trust contained broad distribution authority (“Thereafter, the Trustee shall pay to or for the benefit of that beneficiary only those amounts that the Trustee, in its sole and absolute discretion, deems advisable…”), however, the spendthrift clause included a standard for distributions (“…for the education and support of that beneficiary until the death of the beneficiary…”).

A spendthrift provision should clearly provide that a trust beneficiary may not voluntarily and involuntarily assign such beneficiary’s interest. There is no reason to incorporate a standard (e.g., health, education, support, or maintenance) for distributions where the beneficiary is not the trustee. Finally, a trustee can be permitted to take actions or to make expenditures for the benefit of a beneficiary (such as purchasing a residence for the beneficiary to occupy rent free) without making a direct distribution to the beneficiary.

Trustee Succession

Despite Castellano II’s holding, practitioners should carefully plan for trustee succession. The court’s conclusion in Castellano I that the Debtor made a transfer was based in part on the familial relationship between Linda and Del Alcazar (albeit by marriage to Linda’s niece). Section 101(14) of the Bankruptcy Code provides:

The term “disinterested person” means a person that –

  1. Is not a creditor, an equity security holder, or an insider;
  2. Is not and was not, within 2 years before the date of the filing of the petition, a director, officer, or employee of the debtor; and
  3. Does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the debtor, or for any other reason.

Del Alcazar likely fell within the definition of a “disinterested person,” as he had no interest “materially adverse to the interest of the estate or any class of creditors” by virtue of his relationship with Linda. “The court in Castellano I simply assumed that Linda had control of Del Alcazar due to their familial relationship; however, the Castellano I court’s conclusion that Linda made a transfer based on Linda’s alleged control over Del Alcazar had no apparent basis in fact or law.[1]

Many states have adopted some variation of § 504 of the UTC, which provides that a creditor may not compel a distribution for the trustee’s own benefit where the trustee’s discretion is subject to an ascertainable standard. Where asset protection is a concern, it is best to appoint an unrelated third party as trustee and specify that any successor trustee should be similarly unrelated. Where a related party must be appointed as a trustee, practitioners should carefully draft the ascertainable standard. It may also be helpful to have an independent trust protector appoint successor trustees to avoid any argument that the beneficiaries may install a subordinate trustee.

CONCLUSION

Castellano I will certainly not be the last case in which a court misapplies the law to benefit a creditor, and practitioners should draft very carefully and consider having all distributions held in trust and not passing outright to avoid a costly court battle that will not be resolved by the decision in Castellano II. The case is also a reminder that bankruptcy court decisions are no more than any other “court of first impression,” and can be overturned by a federal district court.

**************************************************
[1] Safanda, 2015 WL 1911130 at fn 4.

Richard Connolly’s World
Health Law & Estate Planning

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares with us pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with a link to the articles.

This week, the first article of interest is “New Wrinkle for Health Law” by Stephanie Armour. This article was featured in The Wall Street Journal on April 12, 2015.

Richard’s description is as follows:

Millions of people have gained health coverage through Medicaid since states began expanding the program under the Affordable Care Act. That also means more Americans may find themselves caught in a little-known law that lets states go after their assets after they die.

For more than 20 years, federal law has allowed states to recover almost all Medicaid costs if recipients are 55 or older when they die. This now applies to many of the 11 million people who joined Medicaid since the health law’s expansion of the state-federal insurance program.

The upshot: Some families are discovering they may have to sell a home or other assets of a deceased relative to reimburse the government.

Please click here to read this article in its entirety.

The second article of interest this week is entitled “How Freezing Eggs Can Affect Your Estate Plan” by Joan M. Burda. This article was featured on Forbes.com on December 10, 2014.

Richard’s description is as follows:

When Apple and Facebook made news for paying the expenses of their female employees to freeze their eggs, chances are you didn’t think it would have any effect on your estate plan, but if you have a daughter or a granddaughter, you may be mistaken.

If either decides to use assisted reproductive technology and freeze her eggs, you’ll need to consider whether to include unborn descendants in your estate plan.

Generally speaking, for estate planning purposes, children, descendants, and heirs refer to people who are genetically, biologically, or legally related to you. Egg freezing, however, increases the chances that you may have a descendant who is neither genetically nor biologically related to you. Then it’ll be up to you to decide whether to include him or her in your estate.

Ignoring how assisted reproductive technology could play a part in your estate plan can be a significant error. Someone you want to include as an heir may be wrongly excluded, and another you have no intention of including could be brought in to share your estate. By specifying whom you do and don’t want to include, you retain control over your estate.

Most clients are unaware of this issue. This article is one way to start the conversation.

Please click here to read this article in its entirety.

Thoughtful Corner
Success Tips for First Year Lawyers

Alan Gassman gave a five hour workshop on professional acceleration for a group of LL.M. and tax students and some practicing lawyers at the University of Florida last Saturday.  So sorry you missed it!  Some of Alan’s new tips for first year lawyers were as follows:

1.) Always show up with a legal pad and two pens in hand.

2.) Answer questions as concisely as possible and see whether more information is requested. Don’t try to explain anything beyond the absolute minimum information that the person needs when that person is another lawyer that you are working with. The person you are interacting with, be it client or other attorney, will ask you what they need to know in addition to that.

3.) Show up to a meeting with a memo you wrote on the topic to be discussed, and hand it to the lawyer you prepared it for. Bring an extra copy so you have one, too. They can glance through the memo and ask you what they need to know.

4.) Smile and be cheerful. If there is a serious situation, be serious, but in overall everyday interactions, be as friendly and humorous as you can.

5.) Say hello when you first see someone at your office during the day, and then say goodbye at the end of the day.

6.) Become the organizer of anything and everything that you are involved with. Use checklists, progress reports, and reminders. Once you manage a project, you “own it” and will become the go-to person. Always have your checklists and the latest progress on each item you are working on with you for meetings or otherwise. You never know when you will be asked about them.

7.) Consider sending anyone in the office that you have a project in progress with an email every evening at 7:00 PM enclosing where you are or anything they may want or need to see about the project. You can accomplish this by utilizing the delay function on your emails.

This email will (1) remind them that you are working on this and (2) establish a habit so that your colleagues know they can go to their 7:00 PM emails to access what you have been working on lately. Your colleagues will quickly learn that the 7:00 PM space in their Inbox always belongs to you!

8.) Work constantly to improve yourself beyond the law and what you do as a lawyer. Concentrate on what you like to do and do best to the extent that it is productive.

Stay tuned for more tips for first year success next week. Alan’s next scheduled workshop for law students and professionals will be on August 22, 2015, at Ave Maria Law School in Naples.  Schedule your tax deductible trip weekend in Naples, and attend this Saturday eight hour interactive workshop, while making new friends and helping others (and yourself) immensely.  A splendid time is guaranteed for all, not to mention one ethics credit hour and seven general credits.

Humor! (or Lack Thereof!)

Sign Saying of the Week

Sign

Cartoon

************************

IN THE NEWS
by Ron Ross

Fed-Ex/Kinko’s is proud to announce their latest merger, this time with Gassman, Crotty & Denicolo, PA! This exciting venture will greatly enhance Fed-Ex/Kinko’s ability to serve their customers. Now they can box and send a lawyer directly to your doorstep overnight!

Deliver by Thursday

*************************************

As you may have heard, parents across the country are complaining about the great number of standardized tests their children have to take. Here in Florida, a compromise has been reached. As an alternative to the FCAT, students may choose one of the following:

  1. Pull the sword from the stone
  2. Identify all of the Colonel’s secret herbs and spices
  3. Go on a scavenger hunt and find a well-paid teacher, a number one pencil, and someone who actually uses trigonometry in real life
  4. Attend an additional 40 days of school per year like the rest of the Western world

Test Taker

Upcoming Seminars and Webinars

LIVE WEBINAR:

Double Alice

Alice Rokahr earned her Juris Doctor at The University of South Dakota School of Law. She was a partner at the firm of Kennedy, Rokahr, Pier & Knoff, LLP for 15 years and has also worked with Wells Fargo Bank and Bankers Trust Company of South Dakota. She currently serves as the President of Trident Trust Company (South Dakota) Inc.

Alice Rokahr and Alan S. Gassman will present a free, 30-minute webinar entitled WHAT IS SO SPECIAL ABOUT SOUTH DAKOTA – DOMESTIC ASSET PROTECTION TRUST LAW AND PRACTICES.

Date: Tuesday, June 9, 2015 | 12:30 pm

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com or click here to register for this webinar.

**********************************************

LIVE BLOOMBERG BNA WEBINAR:

Professor Jerome Hesch, Alan Gassman, Ed Morrow, Christopher Denicolo, and Brandon Ketron will be presenting a 90-minute webinar for Bloomberg BNA Tax & Accounting on ESTATE AND TRUST PLANNING WITH IRA AND QUALIFIED PLAN BENEFITS: AN UNDERSTANDABLE SYSTEM WITH CHARTS AND EASY-TO-UNDERSTAND MATERIALS.

This presentation will include a 300 page E-book for each attendee.

Date: Wednesday, June 10, 2015 | 2:00 PM

Location: Online webinar

Additional Information: To register for this webinar, please email Alan Gassman at agassman@gassmanpa.com.

*******************************************************

LIVE WEBINAR:

Alan Gassman will present a live, free, 30-minute webinar on the topic of THE NEW DOCTOR’S GUIDE TO WEALTH BUILDING, CREDITOR PROTECTION, TRUST PLANNING, AND WHAT THEY DIDN’T TELL YOU IN MEDICAL SCHOOL. There will be two opportunities to attend this presentation.

Date:   Wednesday, June 17, 2015 | 7:30 PM or Saturday, June 20, 2015 | 9:30 AM

Location: Online webinar

Additional Information: To register for the Wednesday/7:30 PM webinar, please click here. To register for the Saturday/9:30 AM webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

***********************************************************

LIVE WEBINAR:

Alan Gassman and noted trust and estate litigator, LL.M in estate planning, and blog master Juan Antunez, J.D., LL.M. will be presenting a free 30-minute webinar on ARBITRATING TRUST AND ESTATES DISPUTES. 

Don’t miss Juan’s wonderful blog site entitled Florida Probate & Trust Litigation Blog, which can be accessed by clicking here, and the many very useful articles thereon.

Date: Thursday, June 25, 2015 | 12:30 PM

Location: Online webinar

Additional Information: To register for this webinar, please click here.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on FINANCIAL RELATIONSHIPS WITH PATIENTS, CO-PAYMENTS, GIFTS, AND GRAFT – HOW TO STAY OUT OF TROUBLE UNDER FLORIDA AND FEDERAL LAW.

This is an essential guide for medical practices and those who advise them. There will be two opportunities to attend this presentation.

Date: Tuesday, July 7, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email Alan Gassman at agassman@gassmanpa.com.

***********************************************

LIVE FLORIDA INSTITUTE OF CPAs (FICPA) WEBINAR:

Alan Gassman will present a webinar on the topic of WHAT FLORIDA CPAS NEED TO KNOW ABOUT ASSET PROTECTION for the Florida Institute of CPAs.

More information about this webinar will be forthcoming. Please stay tuned!

Date: Thursday, July 9, 2015 | 9:30 AM – 10:30 AM

Location: Online webinar

Additional Information: For more information, please contact Alan Gassman at agassman@gassmanpa.com. To register, please contact Thelma Givens at givenst@ficpa.org.

**************************************************

LIVE ORLANDO PRESENTATION:

ORLANDO BUSINESS AND PROFESSIONAL PRACTICE OWNER SYMPOSIUM

Alan S. Gassman, business coach and author David Finkel, and others will present a two-day conference for high-net-worth business and professional practice owners sponsored by Maui Mastermind®.

Alan’s topics will include BASIC AND ADVANCED PLANNING TECHNIQUES FOR THE PROTECTION OF WEALTH, THE 10 BIGGEST MISTAKES THAT BUSINESS OWNERS AND PROFESSIONALS MAKE, and ESTATE TAX AVOIDANCE TECHNIQUES FOR BUSINESS OWNERS AND PROFESSIONALS.

Other topics include A Proven Map to Grow Your Business and Get Your Life Back, Building Wealth Outside of Your Company, Tax Reduction Strategies, and Understanding How Investments Work and What They Cost.

Interested individuals can contact agassman@gassmanpa.com or David Finkel at david@mauimastermind.com.

Date: July 30th and 31st, 2015

Location: Hyatt Regency Orlando | 9801 International Drive, Orlando, FL 32819

Additional Information: To register, please click here or call Kelli Goode at 1-888-889-0944 ext. 915.

********************************************

LIVE WEBINAR:

Alan Gassman will present a live, free, 30-minute webinar on the topic of CREDITOR PROTECTION PLANNING FOR PHYSICIANS AND MEDICAL PRACTICES. There will be two opportunities to attend this presentation.

Date: Wednesday, August 12, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Online webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For additional information, please email agassman@gassmanpa.com.

**********************************************************

LIVE BRADENTON, FLORIDA PRESENTATION:

Alan Gassman will speak at the Coastal Orthopedics Physician Education Seminar on the topics of CREDITOR PROTECTION AND THE 10 BIGGEST MISTAKES DOCTORS CAN MAKE: WHAT THEY DIDN’T TEACH YOU IN MEDICAL SCHOOL.

Coastal Orthopedics, Sports Medicine, and Pain Management is a comprehensive orthopedic practice which has been taking care of patients in Manatee and Sarasota Counties for 40 years. They have sub-specialized, fellowship-trained physicians as well as in-house diagnostics, therapy, and an outpatient surgery center to provide comprehensive, efficient orthopedic care.

Date: Thursday, August 13, 2015 | 6:00 PM

Location: Coastal Orthopedics and Sports Medicine | 6015 Pointe West Boulevard, Bradenton, FL, 34209

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE WEBINAR:

Alan Gassman and Lester Perling will present a live, free, 30-minute webinar on the topic of MEDICAL LAW UPDATE – FEDERAL AND FLORIDA DEVELOPMENTS THAT MEDICAL PRACTICES AND ADVISORS NEED TO BE AWARE OF. There will be two opportunities to attend this presentation.

Date: Tuesday, August 18, 2015 | 12:30 PM – 1:00 PM and 5:00 PM – 5:30 PM

Location: Live webinar

Additional Information: To register for the 12:30 webinar, please click here. To register for the 5:00 webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

**********************************************************

LIVE AVE MARIA SCHOOL OF LAW PROFESSIONAL ACCELERATION WORKSHOP:

Alan Gassman will present a full day workshop for third year law students, alumni, and professionals at Ave Maria School of Law. This program is designed for individuals who wish to enhance their practice and personal lives.

Date: Saturday, August 22, 2015 | 9:00 AM – 5:00 PM

Location: Thomas Moore Commons, Ave Maria School of Law, 1025 Commons Circle, Naples, FL 34119

Additional Information: To download the official invitation to this event, please click here. To RSVP and for more information, please contact Donna Heiser at dheiser@avemarialaw.edu or via phone at 239-687-5405 or Alan Gassman at agassman@gassmanpa.com or via phone at 727-442-1200.

****************************************************

LIVE SARASOTA PRESENTATION:

Alan Gassman will speak at the Southwest Florida Estate Planning Council meeting on September 8th on a topic to be determined. We are open to suggestions!

Date: Tuesday, September 8, 2015 | 3:30 PM – 5:30 PM with dinner to follow

Location: Sarasota, Florida

Additional Information: For additional information, please email Alan Gassman at agassman@gassmanpa.com.

********************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of THE 10 BIGGEST MISTAKES THAT SUCCESSFUL PARENTS (AND GRANDPARENTS) MAKE WITH RESPECT TO COLLEGE AND RELATED DECISIONS FOR HIGH SCHOOL STUDENTS.

Date: Saturday, September 12, 2015 | 9:30 AM

Location: Online Webinar

Additional Information: To register for this webinar, please click here. For more information, please email Alan Gassman at agassman@gassmanpa.com.

*****************************************************

LIVE FORT LAUDERDALE PRESENTATION:

Ken Crotty will be presenting a 1-hour talk on PLANNING FOR THE SALE OF A PROFESSIONAL PRACTICE – TAX, LIABILITY, NON-COMPETITION COVENANT, AND PRACTICAL PLANNING at the Florida Institute of CPAs Annual Accounting Show.

Date: Friday, September 18, 2015 | 3:30 PM – 4:20 PM

Location: Broward County Convention Center | 1950 Eisenhower Blvd, Fort Lauderdale, FL 33316

Additional Information: For additional information, please email Ken Crotty at ken@gassmanpa.com or CPE Conference Manager Diane K. Major at majord@ficpa.org.

*************************************************

LIVE WEBINAR:

Molly Carey Smith and Alan Gassman will present a free webinar on the topic of FAILURE TO LAUNCH: 20-SOMETHINGS WITHOUT A SOLID CAREER PATH – WHAT PARENTS (AND OTHERS) NEED TO KNOW.

Date: Saturday, October 3, 2015 | 9:30 AM

Location: Online webinar

Additional Information: Please click here to register for this webinar. For more information, please email Alan Gassman at agassman@gassmanpa.com.

****************************************************

LIVE WEBINAR:

Alan Gassman will present a webinar on the topic of WHAT EVERY NEW JERSEY ATTORNEY SHOULD KNOW ABOUT FLORIDA ESTATE PLANNING. This webinar will qualify for 2 New Jersey CLE credits.

Most advisors with Florida clients are unaware of the unique rules and planning considerations that affect Florida estate, tax, and business planning. Unlike some other states, Florida’s laws regarding limited liability companies, powers of attorney, taxation, homestead, creditor exemptions, trusts and estates, and documentary stamp taxes are not simply versions of a Uniform Act. They have been crafted by the Florida legislature to apply to various specific issues in an often counterintuitive manner.

This presentation will the following objectives:

  • Unique aspects of the Florida Trust and Probate Codes
  • Creditor protection considerations and Florida’s statutory creditor exemptions
  • The Florida Power of Attorney Act
  • Traps and tricks associated with Florida’s Homestead Law and Elective Share
  • Documentary stamp taxes, sales taxes, rent taxes, property taxes, and how to avoid them
  • Business and tax law anomalies and planning opportunities

Date: Thursday, October 8, 2015 | 12:00 PM – 1:40 PM

Location: Online Webinar

Additional Information: For more information, please email Alan Gassman at agassman@gassmanpa.com or Eileen O’Connor at eoconnor@njsba.com.

********************************************************

LIVE SARASOTA PRESENTATION:

2015 MOTE VASCULAR SURGERY FELLOWS – FACTS OF LIFE TALK SEMINAR FOR FIRST YEAR SURGEONS

Alan Gassman will be speaking on the topic of ESTATE, MEDICAL PRACTICE, RETIREMENT, TAX, INSURANCE, AND BUY/SELL PLANNING – THE EARLIER YOU START, THE SOONER YOU WILL BE SECURE.

Date: Friday, October 23rd and Saturday, October 24th, 2015

Location: To Be Determined

Additional Information: Please contact Alan Gassman at agassman@gassmanpa.com for more information.

*******************************************************

LIVE ST. PETERSBURG PRESENTATION:

ALL CHILDREN’S HOSPITAL FOUNDATION 18TH ANNUAL ESTATE, TAX, LEGAL & FINANCIAL PLANNING SEMINAR

We are pleased to announce that Jonathan Blatttmachr, Howard Zaritsky, Lee-Ford Tritt, Lauren Detzel, Michael Markham, Alan Gassman, and others will be speaking at the 2016 All Children’s Hospital Estate, Tax, Legal & Financial Planning Seminar.

Lauren Detzel will be speaking on Family Law and Tax Planning for Divorce, while Michael Markham will be speaking on Bankruptcy and Creditor Protection/Fraudulent Transfer in Context with Estate Planning. Alan Gassman will speak on Florida Law Tricks and Traps for Estate Planners.

We thank Lydia Bailey and Lori Johnson for their incredible dedication (and patience with certain members of the Board of Advisors.) All Children’s Hospital is affiliated with Johns Hopkins, which is not affiliated with Anthony Hopkins.

Please provide us with your input for other topics for this year and next! Watch this space for more speaker and topic announcements.

Date: Wednesday, February 10, 2016

Location: Live Event at the All Children’s Hospital St. Petersburg Campus; Live webcasts in Tampa, Fort Myers, Belleair, New Port Richey, Lakeland, and Sarasota

Additional Information: Please contact Lydia Bennett Bailey at lydia.bailey@allkids.org for more information.

Notable Seminars by Others
(These conferences are so good that we were not invited to speak!)
 

LIVE ORLANDO PRESENTATION: 

50TH ANNUAL HECKERLING INSTITUTE ON ESTATE PLANNING 

Date: January 11 – January 15, 2016 

Location: To be announced 

Additional Information: Information on the 50th Annual Heckerling Institute on Estate Planning will be available on August 1, 2015. To learn about past Heckerling programs, please visit http://www.law.miami.edu/heckerling/. 

Applicable Federal Rates 

Below we have this month, last month’s, and the preceding month’s Applicable Federal Rates, because for a sale you can use the lowest of the 3.

June Rates

Page 6 of 21« First...45678...20...Last »