In certain circumstances, an employee may receive restricted stock as part of their compensation package. Restricted stock is a type of equity compensation in which the employee (perhaps a corporate executive, startup founder, or startup employee) receives shares of company stock that are subject to specified restrictions. These may include a vesting schedule or other…
Bye-Bye U.S., Hello Exit Tax! If you are a U.S. citizen thinking about relinquishing your U.S. citizenship, or if you are what is defined as a “long-term” green card holder and thinking about giving it up, you may be in for a surprise. The U.S. has a sinister parting gift for you, called an “exit…
How Trusts are Taxed We can talk hours about the intricacies of trust taxation, but here are some basic concepts that will still go a very long way when it comes to how trusts get taxed. Trusts get taxed in two different ways: a grantor trust, and a non-grantor trust. Grantor Trust A grantor trust…
This is Part 3 in a three-part series about Estate Planning for Non-Citizens. In Part 1, I discussed general issues involving non-citizen planning. In Part 2, I discussed what is a QDOT. What’s the Best Way to Own Real Estate if you are not a US citizen? In Part 1, entitled “Estate Planning for the Non-Citizen,”…
This is Part 1 in a three-part series about Estate Planning for Non-Citizens. In Part 2, I discuss what is a QDOT. In Part 3, I discuss the various ways foreigners can own U.S. real property. This article is focused on the issues that occur with regards to estate planning when a non-U.S. citizen is…
This is Part 2 in a series I have written on the use of QSBS in estate planning. Part 1 focused on what is qualified small business stock. QSBS & Non-Grantor Trusts If a business has qualified small business stock under IRS Section 1202, the benefits of QSBS can be expanded on with the effective…
This is a part in a series of articles I have written on various types of irrevocable trusts. What is a Dynasty Trust? Many people refer to dynasty trusts to mean an irrevocable trust that is built so that after the death of the grantor, the trust benefits the grantor’s descendants. I don’t disagree with this…
This is a part in a series of articles I have written on various types of irrevocable trusts. What is a SLAT? A SLAT stands for a Spousal Lifetime Access Trust. It is an irrevocable trust created by one spouse for the benefit of the other spouse during their lifetime. The grantor (person creating the…
This is a part in a series of articles I have written on various types of irrevocable trusts. Intentionally Defective Grantor Trust What is a sale to an Intentionally Defective Grantor Trust (IDGT)? Why would a trust be “intentionally defective”? And what is so popular about this strategy? Intentionally Defective Grantor Trust An IDGT is a…
This is a part in a series of articles I have written on various types of irrevocable trusts. What is a NING? A Nevada Incomplete Gift Non-Grantor trust (NING) is an irrevocable trust built in Nevada, and is popular among those individuals living in high-income tax states seeking to reduce their state income tax liability, or…
This is a part in a series of articles I have written on various types of irrevocable trusts. What is DAPT? One of the most unique forms of irrevocable trusts is a Domestic Asset Protection Trust (DAPT), otherwise referred to as a self-settled spendthrift trust. With most irrevocable trusts, the person setting it up (the…
This is Part 2 in a two-part series about LLCs. In Part 1, I covered “Why People Should Create LLCs?” How should I setup my LLC? Once you know why you need to create an LLC, there are a number of considerations that go into how to set up your LLC to maximize asset protection….
This is Part 1 in a series I have written on the use of QSBS in estate planning. Part 2 focuses on using non-grantor trusts to further leverage QSBS in a future liquidity event. What is Qualified Small Business Stock and Why Is It Important? Shares of a “qualified small business” (as defined by the…
On July 16, 2021, Governor Gavin Newsom signed Assembly Bill 150 into law. This bill enables certain California taxpayers to write off more than the $10,000 limit placed on state and local tax (SALT) deductions — but it’s not automatic, you need to know what to do to get this relief. BRIEF HISTORY OF SALT…
A lot of people have been talking about what President Biden’s tax plan will look like and whether there’s anything we can do now. In April of this year, Biden released the American Families Plan, which essentially increases taxes on both corporations and certain individuals. Following this, the Treasury Department issued its Green Book, which…
This is a part in a series of articles I have written on various types of irrevocable trusts. Understanding Bypass Trusts Prior to 2012, many married couples created joint trusts known as “A-B” trusts. The problem now is that these trusts may actually cause more harm than good. In this article, I discuss Bypass Trusts. Who…
This is a part in a series of articles I have written on various types of irrevocable trusts. It’s not the QTIP you’re thinking of! To better understand this concept, it’s advised that you first read my article about estate taxes and then my article on bypass trusts. The QTIP trust is a popularly-used strategy to…
This is a part in a series of articles I have written on various types of irrevocable trusts. Irrevocable Life Insurance Trusts Why set up an irrevocable life insurance trust (ILIT)? An irrevocable life insurance trust (referred to as an ILIT) is a type of irrevocable trust that typically is used to own life insurance policies…
The concept of step-up in basis is a staple in estate planning. Planning decisions must take this concept into account, as the potential benefits of preserving step-up in basis for your heirs is tremendous. The step-up in basis is a method around paying capital gains taxes, which is a form of income tax. Generally, if…
The Tax Implications of a Foreign Trust The issue of foreign trusts comes up in estate planning during a number of different situations. For example, if you name a successor trustee who is not a US person, your trust will become a foreign trust. Or, if you want to own US assets but you are…
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