Diese Präsentation wurde erfolgreich gemeldet.
Wir verwenden Ihre LinkedIn Profilangaben und Informationen zu Ihren Aktivitäten, um Anzeigen zu personalisieren und Ihnen relevantere Inhalte anzuzeigen. Sie können Ihre Anzeigeneinstellungen jederzeit ändern.
LAW OFFICES

GIVNER & KAYE

BRUCE G'. V”ER APROFESSIONAL CORPORATION PHONE (310) 207-8008
(owen@¢iVne, Ka, .e_com) 12100 W...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

Post-Mortem Planning
September 4, 2014
Page 2 of 3

§17200 petition...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

Post-Mortem Planning

September 4, 2014

Page 3 of 3
4.4. Modified F...
LAW OFFICES

GIVNER & KAYE

BRUCE G‘V"‘ER APROFESSIONALCORPORATION PHONE (310) 207-8008

(bruce@GivnerKaye. com)

OWEN D. ...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

Valuable Information For Your Trustee
April 28, 2014
Page 2 of 6

I...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

Valuable Information For Your Trustee
April 28, 2014
Page 3 of 6

O...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

Valuable Information For Your Trustee
April 28, 2014
Page 4 of 6

I...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

Valuable information For Your Trustee

April 28, 2014
Page 5 of 6
I...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

Valuable Information For Your Trustee
April 28, 2014
Page 6 of 6

T...
TRUSTEE’S ACTION TO CREATE AND FUND SUBTRUSTS
AFTER THE FIRST TRUSTOR’S DEATH

1. TRUST. 

1.1. Original. 

On May 28, 198...
The Trustee will allocate all of the surviving Grantor's trust property to the
Survivor's Trust and administer the Survivo...
and cost required to complete this task.  In some circumstances,  it is in the Trust's best
interest for the Trustee to co...
(ii) liquid assets;  and
(iii) miscellaneous items. 

6.4.1. Real Proper_ty. 

The community property estate includes the ...
Membership - Blank Country Club $10,000
Membership — Blank Country Club $22,500
Loan to Blank Country Club $25,500
Federal...
I balance
Wells Fargo investments brokerage account #0000— $1,326,210
0000 (stocks and bonds) J
6 bonds $150,000
1,860 sha...
not increase the amount of state death taxes payable. 
(2) The Denominator
The denominator shall consist of the value of t...
8.2. Counterparts. 

The Trustee may execute this instrument in one or more counterparts.  Each shall
be deemed an origina...
COUNTY OF LOS ANGELES )

On ,  before me,  ,
Notary Public,  personally appeared HUSBAND,  who proved to me on the basis o...
BRUCE GIVNER

(bruce@GivnerKaye. com)

OWEN D.  KAYE

(owen@GivnerKaye. com)
KATHLEEN GRAHAM GIVNER

(kalhy@GivnerKaye. co...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014

Checklist After First Spouse’s Death
Page 2 of 1...
LAW OFFICES

GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014
Checklist After First Spouse’s Death

Page 3 of ...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014
Checklist After First Spouse's Death
Page 4 of 12...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014

Checklist After First Spouse's Death
Page 5 of 1...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014
Checklist After First Spouse’s Death

Page 6 of 1...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014
Checklist After First Spouse's Death

Page 7 of 1...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014
Checklist After First Spouse’s Death
Page 8 of 12...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014
Checklist After First Spouse’s Death
Page 9 of 12...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014
Checklist After First Spouse’s Death
Page 10 of 1...
LAW OFFICES
GIVNER & KAYE

A PROFESSIONAL CORPORATION

February 12, 2014

Checklist After First Spouse’s Death
Page 11 of ...
LAW OFFICES
GIVNER 8: KAYE

A PROFESSIONAL CORPORATION

February 12, 2014

Checklist After First Spouse’s Death
Page 12 of...
Nächste SlideShare
Wird geladen in …5
×

14 09-04 Everything You Always Wanted To Know About Post-Mortem Planning

2.159 Aufrufe

Veröffentlicht am

Portability vs. disclaimer to a bypass trust; getting rid of an unwanted bypass trust; notice of proposed action vs. a 17200 petition; valuable information for the successor trustee; Heggstad assignment of assets; modified financial statement for the successor trustee; funding the subtrusts; first spouse post-mortem checklist; Prop. 13 problems; 16061.7 notice;

Veröffentlicht in: Recht
  • Als Erste(r) kommentieren

  • Gehören Sie zu den Ersten, denen das gefällt!

14 09-04 Everything You Always Wanted To Know About Post-Mortem Planning

  1. 1. LAW OFFICES GIVNER & KAYE BRUCE G'. V”ER APROFESSIONAL CORPORATION PHONE (310) 207-8008 (owen@¢iVne, Ka, .e_com) 12100 WILSHIRE BOULEVARD KATHLEEN GIVNER LOS ANGELES, CALIFORNIA 90025 FAX (310) 207'87‘33 (kath GivnerKa e. com) www. GivnerKaye. com (818) 785'3027 NEDA BARKHORDAR (neda@GivnerKaye. com) September 4, 2014 Everything You Always Wanted To Know About Post-Mortem Planning But Were Afraid To Ask 1. Forthcoming Seminars. September 18 — Everything You Always Wanted To Know About Insurance Trusts But Were Afraid To Ask October 2 - Conservatorships & Elder Abuse — An Introduction November6 - Funding Stale Trusts After The First Spouse’s Death: Estate of Olsen v. Commissioner (And Related Issues) November 20- IRS National Office Private Letter Rulings (and the California Equivalents). User Fees. Legal Fees. Topics, e. g., IRAs, Section 355 Split-Offs. Timing. Opinion Letters and the Accuracy—Related Penalty. December 4 — Everything You Always Wanted To Know About Controlled Foreign Corporations and Subpart F Income But Were Afraid To Ask December 18 - Everything You Always Wanted To Know About Public Charities and Private Foundations But Were Afraid To Ask 2. Tax Planning For When The First Spouse Dies. 2.1. Relying on Portability? 2.2. Relying On A Disclaimer? 3. Getting Rid Of An Unwanted Bypass Trust. Fund the bypass trust with a promissory note? Get the surviving spouse and all of the beneficiaries to agree so you don’t have to go to court? ? Notice of Proposed Action under Probate Code §1650O because it is not one of the prohibited acts?
  2. 2. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION Post-Mortem Planning September 4, 2014 Page 2 of 3 §17200 petition to terminate the trust under §15403: (a) Except as provided in subdivision (b), if all beneficiaries of an irrevocable trust consent, they may compel modification or termination of the trust upon petition to the court. (b) If the continuance of the trust is necessary to carry out a material purpose of the trust, the trust cannot be modified or terminated unless the Court, in its discretion, determines that the reason for doing so under the circumstances outweighs the interest in accomplishing a material gurgose of the trust. Under this section the court does not have discretion to permit termination of a trust that is subject to a valid restraint on transfer of the beneficiary's interest as provided in Chapter 2 (commencing with §15300). Does the reference to §153OO as to termination mean that you get rid of the bypass trust but the assets go to a marital trust with the same restrictions on the spouse on transfer? 15409. (a) On petition by a trustee or beneficiary, the court may modify the administrative or dispositive provisions of the trust or terminate the trust it, owing to circumstances not known to the settlor and not anticipated by the settlor, the continuation of the trust under its terms would defeat or substantially impair the accomplishment of the purposes of the trust. In this case, if necessary to carry out the purposes of the trust, the court may order the trustee to do acts that are not authorized or are forbidden by the trust instrument. (b) The court shall consider a trust provision restraining transfer of the beneficiary's interest as a factor in making its decision whether to modify or terminate the trust, but the court is not precluded from exercising its discretion to modify or terminate the trust solely because of a restraint on transfer. 4. Valuable Information For The Successor Trustee. 4.1. Blanket (Heggstad) Assignment of Assets. 4.2. Pre—Mortem Transfer Of Assets To Trust. 4.3. Schedule A of Family Trust.
  3. 3. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION Post-Mortem Planning September 4, 2014 Page 3 of 3 4.4. Modified Financial Statement For The File. 4.5. Attached Format. 4.6. Maintenance Program. _ 5. Funding The Subtrusts. 6. The First Spouse Post-Mortem Checklist.
  4. 4. LAW OFFICES GIVNER & KAYE BRUCE G‘V"‘ER APROFESSIONALCORPORATION PHONE (310) 207-8008 (bruce@GivnerKaye. com) OWEN D. KAYE SUITE445 (818) 785'7579 @ - M _ ) 12100 WILSHIRE BOULEVARD I<oA“Te| -rl1LECI? I‘lmC0a‘alrl/ (IalE(R com LOS ANGELES, CALIFORNIA 90025 FAX (310) 207-3700 (kathy@GivnerKaye. com) www_Givne1-Kaye, com (818) 785'3027 FEBA BéRKH? <RDAR www. MajorTaxProblems. com ne a@ IV| 'le| ' aye. com) April 28, 2014 Valuable Information For Your Trustee What if you died suddenly? What information would your trustee need to know to be able to administer your estate? The trustee must know what the assets are, what the debts are, and how to contact your beneficiaries. The trustee would like a copy of your most recent tax return, a personal financial statement, information about any insurance policies, safe deposit boxes, special assets (art, patents), and access to your on—line accounts (Facebook, Schwab) and your personal computer (password). The list below is not complete. It is designed to get you to think about these important facts and issues. Contact Information: Family and Advisors T Relatives’ name, birthdate, address, phone number and e-mail Accountants name, address, phone number and e-mail Property & casualty insurance agent’s name, address, phone number and e—mail Business lawyer’s name, address, phone number and e-mail Money manager’s name, address and contact 5. information Commercial bankers name, address, contact info 7 Life insurance agent’s name, address, contact info Personal physician’s name, address and Contact information
  5. 5. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION Valuable Information For Your Trustee April 28, 2014 Page 2 of 6 Item Name Description Location Religious | eader's/ institution’s name, address and Contact information # Estate Planning Documents 10. Wills, and codicils Dates . Revocable (family) Trust, Dates and amendments Durable powers of attorney Dates Trustees? Appointees? . _x _x [') _ 13. “Blanket" Assignment of Date Assets Dates Other documents transferring assets to the trust A : P- 15. Family charitable foundation? Donor advised fund with a community foundation or money manager? 17. Charitable remainder trust? 18. irrevocable trusts Trustee? Assets? 19. Family business entities, Assets? e. g., FLPs, FLLCs, closely held corporations
  6. 6. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION Valuable Information For Your Trustee April 28, 2014 Page 3 of 6 Other Important Documents Naturalization papers - 22. Adoption papers 23. Passports 25. Pre- or post-nuptial agreement Numbers, date and location of issue registration I 27 Divorce papers Veteran’s discharge 29. Burial instructions ceremony would you like, whom to officiate, etc. Cemetery lot Social Security Numbers 32. Veteran’s Administration C number Recent income tax returns Any gift tax returns Business records
  7. 7. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION Valuable Information For Your Trustee April 28, 2014 Page 4 of 6 Insurance Description Location Notes Health care coverage Dental plan . Home — title insurance policy . Home — insurance policies, e. g., fire and earthquake Umbrella insurance policy Personal life insurance Company policies name, policy number, type of policy, who is the insured, who is the beneficiary, travel insurance, Accidental Death Asset Information On-line brokerage accounts Log—in and password such as Charles Schwab Home — copy of grant deed Cars — certificates of ownership Safe deposit boxes Who has access?
  8. 8. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION Valuable information For Your Trustee April 28, 2014 Page 5 of 6 I Item ’ Name Description Location Notes 47% Other storage units? 48. Coin collection 49. Art collection 50. Vlfine collection 51. Pets 52. Jewelry ‘F 53. Checking accounts 54. Savings Accounts 55 Retirement Accounts 56. Money Market Accounts 57. Bonds 58. Airline Mileage accounts 59. Employer death benefits 60. Cal—Vet Benefits 61. Investment real property(ies) 62. Membership interest in LLCs 63. Partnership interests 64. Stock in closely held corporations 65. Interest as beneficiary in trusts
  9. 9. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION Valuable Information For Your Trustee April 28, 2014 Page 6 of 6 T List of assets, and their value, in your residence, including furniture, art, cash in your wallet and elsewhere, clothing (including valuable furs) Debt Information Home loan Lender? Balance? Home — deed of trust — 70. Other loans Lender amounts outstanding 71. Credit card balances — . Payments made automatically each month Location N
  10. 10. TRUSTEE’S ACTION TO CREATE AND FUND SUBTRUSTS AFTER THE FIRST TRUSTOR’S DEATH 1. TRUST. 1.1. Original. On May 28, 1980, HUSBAND and WIFE executed the SMITH FAMILY TRUST (“Trust"), as Trustors and Trustees. 1.2. First Amendment. The Trust has been amended several times: (I) Fourth Amendment (a complete restatement) —— by Trustors and Trustees on July 16, 2009; (ii) WIFE resigned as a Trustee, leaving HUSBAND as the sole Trustee, on December 23, 2011; (iii) Fifth Amendment — by Trustors and HUSBAND as Trustee on December 20, 2012; and (iv) Sixth Amendment — by HUSBAND as surviving Trustor and Trustee on June 11, 2013. 2. DEATH. Trustor and Trustee WIFE (“Decedent”), died on January 22, 2013, survived by her spouse, HUSBAND (“Survivor"). 3. PURPOSE. This Trustee's Action To Create And Fund Subtrusts After The First Trustor’s Death ("Action”) is to memorialize the actions the Trustee has taken to fulfill his responsibilities under Trust Article Five, entitled “Administration of Our Trust Upon the Death of a Grantor, ” due to Decedent’s death. The Trustee has been holding the Trust assets in an administrative trust since Decedent’s death. 4. TRUST DIVISION. Trust Section 5.01, entitled “Surviving Grantor’s Trust Property and Deceased Grantor’s Trust Property” provides, in relevant part, as follows: After the death of the first of us to die, the surviving Grantor's interest in the community property of our trust and the surviving Grantor's separate trust property will be referred to as the "surviving Grantor's trust property. " SMITH Family Trust — Trustee's Action To Create And Fund Subtrusts After The First Trustor’s Death 1 GIVNER 8: KAYE, A PROFESSIONAL CORPORATION, 12100 WILSHIRE BLVD. , SUITE 445, LOS ANGELES, CALIFORNIA 90025 I (310) 207-3003
  11. 11. The Trustee will allocate all of the surviving Grantor's trust property to the Survivor's Trust and administer the Survivor's Trust as provided in Article Eight. A deceased Grantor's interest in the community property of our trust and a deceased Grantor’s separate trust property will be referred to as the "deceased Grantor's trust property. " 5. cAvEATs. ‘ 5.1. Internal vs. Physical Allocation. The Trustee must keep Trust property separate from other property and designate it as Trust property? A Trustee may make: (I) an “internal” allocation of Trust assets? or (ii) a physical separation and still satisfy the Trustee's fiduciary duty. Bookkeeping entries and other internal documents, such as charts or ledgers listing the Trust assets, should suffice. The great risk with the internal allocation method is that the Trustee will fail to adequately document the allocation. Therefore, the Trustee has decided to use this document to lay the groundwork for a physical allocation of the assets. The transfer of title will follow the completion of this instrument. 5.2. Principal Residence. The Trustee is aware that if Decedent’s and Survivors principal residence is partly or entirely allocated to the Family Trust, Survivor may lose some income tax benefits. “ 5.3. Charts And Ledgers. Tkn '1"-. ..-«I-ma Lush I, Ant- rIfrPIvI'; t‘f nlnnrhs nrsnl IAIJI-«A I IIC I ILIDLUCF HOD i''J[. r'i. ’2lv‘§Ji'/ '*JHGI. 's7 Kati-7“ LO GIILI ICU‘ ‘C: which this allocation of assets to fund the subtrusts is based. 2. > 2 I ) 5 -I‘ 1‘ : - Fnnt n say: '5!". ."‘ S. ¢r41§ I (D A A ‘J XJUDUIIICIIL LIIC 5.4. Cost Of The Funding Process. The Trustee understands that to do a good and thorough job preparing: (i) this instrument; and (ii) related funding instruments, e. g., deeds, assignment of partnership interests, It is common to incur professional fees of at least three thousand dollars ($3,000.00), and sometimes much more. No representation is made, in advance, regarding the time 1 Much of this is adapted from the treatise by Hartog & Dirkes, California Trust Practice, ‘[[4.03, published by Warren, Gorham and Lamont (1998). 2 Probate Code §1e009. 3 Probate Code §1e200. 4 The IRC §121 two hundred fifty thousand dollar ($250,000.00) exclusion. SMITH Family Trust — Trustee’s Action To Create And Fund Subtrusts After The First Trustor’s Death 2 GIVNER 8. KAYE, A PRoFEssIoNAL CORPORATION, 12100 WILSHIRE BLVD. , SUITE 445, Los ANGELES, CALIFORNIA 90025 | (310)207-8008
  12. 12. and cost required to complete this task. In some circumstances, it is in the Trust's best interest for the Trustee to complete part of the process himself or herself, rather than to pay another party (e. g., a C. P.A. ) to do so. 6. CALCULATIONS. 6.1. Gross Estate. The community property estate is, according to IRS Form 706, $17,102,678, which is derived by doubling the amount on Schedules F, G and I. Decedent did not own any separate property, so it follows that Survivor's one half of the community property is $8,551,339. 6.2. Expenses. 6.2.1 . Decedent’s. IRS Form 706, Part 5, page 3, indicates total deductions of $7,500 (funeral and estate administration expenses). Therefore, Decedent's one-half (1/2) of the estate is ($8,551,339 — $7,500 = ) $8,543,839. 6.2.2. Survivor's. Since there are no community property deductions, Survivor's one-half (1/2) of the estate is $8,551,339. 6.3. Assets Unable To Be Allocated. The community property includes a total of $1,029,828 in the following two IRAs: (I) Wells Fargo — $34,381; and (ii) Raymond James & Associates — $995,446. In other words, Decedent's estate includes exactly one-half (1/2) that amount, or $514,914. IRAs by their very nature cannot be divided and allocated among the subtrusts. 6.4. Assets To Be Allocated. The community property estate includes ($17,102,678 — $1,029,828 = ) $16,072,850 of assets (and $7,500 of funeral expenses) which can be divided and allocated, which consists of various: (i) real property; SMITH Family Trust — Trustee's Action To Create And Fund Subtrusts After The First Trustor’s Death 3 GIVNER & KAYE, A PROFESSIONAL CORPORATION, 12100 WILSHIRE BLVD. , SUITE 445, Los ANGELES, CALIFORNIA 90025 | (310) 207-8008
  13. 13. (ii) liquid assets; and (iii) miscellaneous items. 6.4.1. Real Proper_ty. The community property estate includes the following pieces of real property worth $2,534,270: $2,506,770 50% interest as tenant—in—cOmmon in 0000 An here St. , Los Angeles, CA 90000 9.7699 acres of unimproved land in Blank, CA $27,500 TOTAL $2,534,270 6.4.2. Liguid Assets. The community property estate includes the following liquid assets worth a combined value of $3,286,095: 15 Enter rise Bank #0000000—00000, cash balance $505,750 Wells Fargo checking account #00000, cash balance $924,782 Wells Fargo investments account #0000—0000, cash $114,536 I balance U. S. Bank checking account #0—000—0000—0000, cash $758 balance Wells Fargo investments brokerage account #000O- $1,326,210 0000 (stocks and bonds) I 6 bonds $150,000 1,860 shares of stock in Prudential Financial $108,959 10,000 shares of First Enterprise Bank $155,100 $3,286,095 6.4.3. Miscellaneous Items. The community property estate includes the following miscellaneous items worth a combined value of $10,252,486: .202670% interest in Blank Trust Ill Partnership $12,381 79.5% interest in Blank Enterprises, Limited $5,310,113 Partnershi Loan receivable from Blank Cor oration $4,350,000 100 1—oz. gold Krugerands I $169,250 SMITH Family Trust — Trustee’s Action To Create And Fund Subtrusts After The First Trustor’s Death 4 GIVNER 8: KAYE, A PROFESSIONAL CORPORATION, 12100 WILSHIRE BLVD. , SUITE 445, LOS ANGELES, CALIFORNIA 90025 I (310) 207-8008
  14. 14. Membership - Blank Country Club $10,000 Membership — Blank Country Club $22,500 Loan to Blank Country Club $25,500 Federal income tax refund from 2012 Form 1040 $253,244 California state income tax refund from 2012 Form $65,368 540 North Carolina State income tax refund from Form D- $2,130 400 2002 Lexus GS $7,000 Home furnishings and personal property $25,000 TOTAL $1 0,252,486 6.4.4. Confirmation. The total real property of $2,534,270, plus total liquid assets of $3,286,095, plus total miscellaneous items of $10,252,486, plus total annuities of $1,029,828, equaling a total community property estate of $17,102,677 (allowing for a $1 rounding error), and Decedent’s estate includes exactly one-half that amount, or $8,551,339 less $7,500 of expenses = $8,543,839. 7. ALLOCATE ASSETS. 7.1. Survivor’s Trust. 7.1.1. General Direction From Trust. Trust Section 5.01, entitled "Surviving Grantor’s Trust Property and Deceased Grantor's Trust Property, “ instructs the Trustee to allocate to the Survivor’s Trust: the surviving Grantor's interest in the community property of our trust and the surviving Grantor’s separate trust property 7.1.2. Specific Allocation. The Trustee allocates the following assets to the Survivor’s Trust (all real property figures are net of property taxes and debt): 9.7699 acres of unimproved land in Blank, CA I $27,500 15‘ Enterprise Bank #0000000—00000, cash balance I $505,750 Wells Fargo checking account #00000, cash balance I $924,782 Wells Fargo investments account #0000—0O00, cash $114,536 balance U. S. Bank checking account #0-000-0000-0000, cash $758 SMITH Family Trust-— Trustee’s Action To Create And Fund Subtrusts After The First Trustor’s Death 5 GIVNER & KAYE. A PROFESSIONAL CORPORATION, 12100 WILSHIRE BLvo. , Sums 445, Los ANGELES, CALIFORNIA 90025 | (310) 207-8008
  15. 15. I balance Wells Fargo investments brokerage account #0000— $1,326,210 0000 (stocks and bonds) J 6 bonds $150,000 1,860 shares of stock in Prudential Financial $108,959 10,000 shares of First Enterprise Bank $155,100 .202670% interest in Blank Trust lll Partnership $12,381 100 1-02. gold Krugerands $169,250 Membership - Blank Country Club $10,000 Membership — Blank Country Club $22,500 Loan to Blank Country Club $25,500 Federal income tax refund from 2012 Form 1040 $253,244 I California state income tax refund from 2012 Form $65,368 540 North Carolina State income tax refund from Form D— $2,130 400 | 2002 Lexus GS $7,000 Home furnishings and personal property $25,000 19.11862% of loan receivable from Blank Corporation $831,660 49.5% interest in Blank Enterprises, Limited Partners $3,306,297 §U_BIQT_/5': _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _$8_-0_43;»9_? —5_ $8,036,426 7.2. Marital Trust. 7.2.1. General Direction From Trust. Trust Section 7.01(a), entitled "Creation of the Marital Share, " provides that: Our Trustee shall allocate to the Marital Share a fractional share of the deceased Grantor's remaining trust property calculated as follows: (1) The Numerator The numerator of the fraction shall equal the minimum value, assuming the value qualifies for the marital deduction, sufficient to reduce the federal estate tax to the lowest possible amount. in computing the numerator, our Trustee shall take into account the deceased Grantor's gifts (including gifts treated as made by the deceased Grantor) and all deductions, exclusions, credits and reductions in value allowed in computing such tax; provided, however, that any state death tax credit shall be taken into account for this purpose only to the extent that it does SMITH Family Trust — Trustee’s Action To Create And Fund Subtrusts After The First Trustor’s Death 6 GIVNER & KAYE, A PROFESSIONAL CORPORATION, 12100 WILSHIRE BLVD. , Sums 445, Los ANGELES, CALIFORNIA 90025 I (310) 207-8008
  16. 16. not increase the amount of state death taxes payable. (2) The Denominator The denominator shall consist of the value of the deceased Grantor's remaining trust property as finally determined for federal estate tax purposes. 7.2.2. Specific Allocation. The Trustee allocates the following assets to the Marital Trust: 28.35984% interest as tenant-in-common in 0000 $710,916 Anwvhere St. , Los Angeles, CA 90000 66.00800% of loan receivable from Blank Corporation $2,871,348 $3,582,264 7.3. Family Trust. 7.3.1. General Direction From Trust. Trust Section 7.01(b), entitled "Creation of the NOn~MaritaI Share, " instructs the Trustee to allocate all of the deceased Grantor’s property not allocated to the Marital Trust to the Family Trust. 7.3.2. Specific Allocation. The Trustee allocates the following assets to the Family Trust (all real property figures are net of property taxes and debt): 71.64016% interest as tenant-in-common in 0000 $1,795,854 Anywhere St. , Los Angeles, CA 90000 30% interest in Blank Enterprises, Limited Partners $2,003,816 14.87338% of loan receivable from Blank Corporation $646,992 TOTAL I $4,446,662 MISCELLANEOUS. 8.1. Amendments. This instrument shall not be altered, amended, or repealed, except by the Trustee in writing. SMITH Family Trust — Trustee’s Action TO Create And Fund Subtrusts After The First Trustor’s Death 7 GIVNER & KAYE, A PROFESSIONAL CORPORATION, 12100 WILSHIRE BLVD, SUITE 445, Los ANGELES, CALIFORNIA 90025 | (310) 207-8008
  17. 17. 8.2. Counterparts. The Trustee may execute this instrument in one or more counterparts. Each shall be deemed an original, but all of them constitute one agreement. 8.3. Governing Law. California law governs this instrument. 8.4. Severability. If any part, clause or condition of this instrument is held to be void, invalid or inoperative, it shall not affect any other provision. The rest of the instrument shall continue to be effective as though the void, invalid or inoperative part, clause or conditions had not been made. 8.5. Time. The Trustee understands that time is of the essence in the performance of each and every action contained in this instrument. 8.6. Venue. The Trustee acknowledges that jurisdiction and venue for any disputes concerning this instrument properly lie in Los Angeles County, California. 9. EXECUTION I certify (Or declare) under penalty of perjury that the foregoing is true and correct. Executed at , California effective , 2014. SUCCESSOR SOLE TRUSTEE HUSBAND STATE OF CALIFORNIA ) ) SMITH Family Trust — Trustee’s Action To Create And Fund Subtrusts After The First Trustor’s Death 8 GIVNER & KAYE. A PRoFessIoNAL CORPORATION, 12100 WILSHIRE BLVD. , SUITE 445, Los ANGELES, CALIFORNIA 90025 I (310) 207-8008
  18. 18. COUNTY OF LOS ANGELES ) On , before me, , Notary Public, personally appeared HUSBAND, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which he acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary (SEAL) SMITH Family Trust — Trustee’s Action To Create And Fund Subtrusts After The First Trustor’s Death 9 GIVNER & KAYE, A PROFESSIONAL CORPORATION, 12100 WILSHIRE BI. vo. , SUITE 445, Los ANGELES, CALIFORNIA 90025 I (31 0) 207-3003
  19. 19. BRUCE GIVNER (bruce@GivnerKaye. com) OWEN D. KAYE (owen@GivnerKaye. com) KATHLEEN GRAHAM GIVNER (kalhy@GivnerKaye. com) NEDA BARKHORDAR lneda@GivnerKave. com) A. 1. 8. b. LAW OFFICES G IVN E R & KAY E A PROFESSIONAL CORPORATION SUITE 445 12100 WILSHIRE BOULEVARD LOS ANGELES, CALIFORNIA 90025 wvvw. GivnerKaye. com February 12, 2014 Checklist After First Spouse’s Death TELEPHONE (310) 207-8008 (818) 785-7579 FACSIMILE (310)207-8708 (818) 785-3027 Step One: Prepare for First Meeting First telephone call confirm date of death and request copy of death certificate warn of need to send Probate Code §16061.7 notice within 60 days of death __ 2. Review trust instrument a. II -‘. =r<. o-'". <D. e.0.UI ? ~'-T‘ 5,‘, - o>I>—x. / —/ i '3 / Identify subtrusts established at first death Survivor’s trust Disclaimer trust Credit (a. k.a. “bypass” or "exclusion” or “exemptiOn”) trust Marital trust Watch for second marriage situations General dispositive provisions Powers of appointment Prorata or Nonprorata distribution Disclaimers Estate tax clause ”Administrative trust” clause Allocation of principal and income Report and account clause Prudent investor clause Trustee provisions Look for S corporation issues Power to divide trusts Payment of interest Gift provisions ”Disqualified” persons Ambiguities and drafting errors
  20. 20. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse’s Death Page 2 of 12 S. t. _ (1) _ (2) _ (3) _ (4) __ (5) _ (5) _ (7) _ (8) _ (9) Specific gifts Identify marital deduction formula Importance Types of formulae Advantages of true worth pecuniary marital Disadvantages of true worth pecuniary marital Advantages of fairly representative pecuniary marital Disadvantages of fairly representative pecuniary marital Advantages of fractional share Disadvantages of fractional share Conventional wisdom reconsidered _ (10) Problems of the unfunded or "stale" trust u. Generation—skipping transfer (GST) tax issues _ (1) Allocation of deceased spouse's exemption _ (2) Reverse QTIP election _ (3) GST—related considerations v. Provision for digital assets? Review pour—over Will Review other documents Prepare summary of estate planning documents Step Two: First Meeting with Client (Successor Trustee) Identify the client and determine scope of representation Complete new client information sheet Educate client about trust administration Summarize the trust and distribution provisions Collect asset information a. Review title to assets _ (1) _ (2) _ (3) Assets in the trust Assets outside trust and subject to distribution by Will Assets outside trust but not subject to distribution by Will
  21. 21. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse’s Death Page 3 of 12 . __ (4) _ (5) Information about assets on hard drives, discs, Internet, etc. Web sites, Facebook, other intellectual property Determine if legal action is required to collect assets into trust Estimate value of assets Discuss need for appraisals Identify need for investment advice and make referral to broker Identify dividend reinvestment accounts Identify out-of-state real property (does client have a lawyer already? ) Identify depreciating or wasting assets Identify assets subject to special regulatory or contractual controls Identify safe deposit boxes and arrange for inventory Discuss insurance coverage - Trustee E&O policy - Property and casualty coverage on trust assets 0 Successor Trustee must be added to policies for all trust property Identify assets subject to options, escrows, or foreclosures Identify hazardous waste problems Have client sign authorization forms _ 6. Collect liability information Determine nature and amount of outstanding liabilities Funeral and last illness expenses chargeable solely to deceased spouse Identify potential creditors and outstanding lawsuits Discuss liability of trust for decedent's debts Consider court petition or agreement to allocate debts between trust and surviving spouse Discuss optional creditor's claim procedure Consider 1-year statute of limitations Identify outstanding guarantees Was decedent a notary? e Notify Secretary of State
  22. 22. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse's Death Page 4 of 12 - Convey journals to County a Destroy seal 7. Collect beneficiary information 8. Review document list 9. Discuss fiduciary duties Source of trustee powers Standard of trust management Fiduciary relationship a b c d. Protect, preserve, and make trust property productive e Anti-commingling rule f Duty to defend the trust g Non—delegation of trustee powers h Reporting and accounting requirement _ (1) Probate Code §16061.7 notice within 60 days of death __ (2) Duty to keep beneficiaries informed (3) Mandatory accounting requirements for trusts established after July 1, 1987 _ (4) Contents of account __ (5) Accounting on request of any beneficiary __ (6) Waivers _ (7) Recommend voluntary accounting even if not required _ (8) Consider obtaining court approval of accounting i. Record-keeping __ j. Principal and income law __ 10. Discuss trust checking account/ handling of administrative trust transactions Advise client to open trust checking account a b. Determine surviving spouse's cash needs for personal expenses c Determine if administrative expenses already paid d Give client list of administrative expenses
  23. 23. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse's Death Page 5 of 12 11. 3. b. _ (1 (2 ) ) Discuss estate tax issues Determine if surviving spouse is a U. S. citizen Consider need to file Form 706 estate tax return If slightly below the filing threshold, still a good idea? If a nontaxable estate, file an abbreviated 706 to claim the DSUE (“Portabi| ity"). Helps confirm basis at first spouse's death. If client says “no, ” have letter confirming our advice in writing. Consider need for and timing of extension to file and/ or pay tax Discuss alternate valuation Discuss special tax elections that might be available Review prior gifts Determine if any gift tax returns (IRS Form 709) ever filed Determine if any gift tax returns required for unreported gifts Determine if gift tax returns required to allocate GST exemption Determine if gifts by an agent acting under a power of attorney were authorized Determine if any gifts were made from the trust Identify assets includable although not othen/ vise inventoried Determine need for state estate tax returns in states other than state of domicile Consider GST issues Consider disclaimer planning To reduce or eliminate marital gift to fully use unified credit To create a marital deduction To perfect or increase charitable deduction gift To avoid general powers of appointment To skip a generation To qualify for stock redemption under IRC §303 To eliminate nonqualified heirs to qualify for IRC §2032A To avoid multiple administrations and unnecessary estate taxes To terminate a trust
  24. 24. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse’s Death Page 6 of 12 _ (10) To avoid income taxes _ (11) To accelerate estate tax to qualify for IRC §2013 prior transfer property (PTP) credit _ k. Transactions with irrevocable life insurance trust _ 12. Discuss income tax issues _ a. Is there a reason to avoid the funding of the bypass trust so that the assets are included in the surviving spouse's taxable estate and get a basis step-up at the surviving spouse's later death? _ b. Allocate responsibility for decedent's personal return (IRS Form 104) and fiduciary returns (IRS Form 1041) _ c. Determine what returns must be filed _ d. Explain basis step-up or step—down _ (1) Decedent spouse's separate property receives full adjustment _ (2) Separate property of surviving spouse receives no adjustment _ (3) Joint tenancy property receives partial adjustment __ (4) Community property receives full adjustment _ (5) Transmutations within 1 year of death __ (6) Joint tenancy property transferred directly to joint revocable trust _ e. Determine whether to use administrative trust _ f. Discuss income tax consequences of non—prorata allocation of community property _ g. Simple versus complex trusts _ h. Accumulation of income permitted __ i. Trust must report on calendar year basis _ j. Discuss income tax brackets for trusts k. Consider timing of distributions; 65-day rule Discuss need to issue IRS Forms 1099 Personal exemption Quarterly estimates for trust S corporation Passive loss deduction
  25. 25. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse's Death Page 7 of 12 _ q. Discuss income tax consequences of funding marital gift __ r. Discuss trust income during administration period _ s. Have client sign IRS Form SS-4 to obtain TIN for administrative trust _ 13. Discuss real property tax issues Does a “change in ownership" Occur which requires a Legal Entity BOE-100-B within 90 days (or a 10% penalty)? __ 14. Trustee: __ a. Compensation _ b. Time records _ c. Errors and Omissions Insurance. _ 15. File IRS Form 56 Notice Concerning Fiduciary Relationship _ 16. Preliminary liquidity analysis _ 17. Discuss fees, costs, retainer, and fee Agreement C. Step Three: Actions Following First Meeting _ 1. New case set-up‘ _ a. Set up new trust administration file _ b. Prepare and mail fee agreement _ c. Prepare joint representation agreement d. Apply for TIN if using administrative Trust _ 2. Calendar critical dates _ 3. Lodge pour-over Will with county clerk’ within 30 days of death3 and obtain certified copy _ 4. Prepare and send Medi-Cal notice _ 5. Prepare certification of trust and affidavit of death 1 To learn whether a probate case has been filed or to obtain a case number, you may search the case index or call 213-974-5171 and provide the decedent's full name and date of death. Once a case number is obtained, it is possible to monitor a case via the court's website, |asuperiorcourt. org. L. A. Superior Court information 213-974-5230; 974-5171 index. 2 For Los Angeles County that is Stanley Mosk Courthouse, 111 North Hill Street, L. A., CA 90012. 3 Probate Code §8200(a) requires the custodian of the Will to lodge it within 30 days of learning of the decedent's death. §8200(b) provides that a custodian who fails to do so “is liable for all damages sustained by any person injured by the failure. " Government Code §70626(d) now (August, 2012) provides that courts will charge a $50 fee (made out to "Clerk, L. A. Superior Court") to lodge a Vlfill.
  26. 26. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse’s Death Page 8 of 12 _ 6. Send disclaimer letter (disclaimer trust plan only) _ 7. Prepare and file change of ownership form _ 8. Collect asset and liability information _ a. Prepare preliminary inventory and mail to client with sample asset list _ b Prepare and send letters to financial institutions _ c Prepare and send letters to insurance companies _ d Order deeds from title company for all real property _ e. Order appraisals for all parcels of real property _ f Order appraisals for tangible personal property _ g Order appraisals for intangible personal property _ h Order appraisals for business interests Prepare and send letters regarding retirement benefits _ j. Enter data into spreadsheet and fiduciary accounting program _ 9. Prepare forms for creditor claim procedure _ 10. Record certification of trust in each county where real property located __ 11. Prepare and send IRS Form 4506 requesting copies of gift tax returns _ 12. Prepare and send 16061.7 letter to beneficiaries o Beneficiaries o Heirs . Within 60 days! 0 Calendar when the 120 days runs _ 13. Prepare and send trust administration memorandum _ 14. Prepare letter of instructions to brokers _ 15. Deliver stock certificates to broker __ 16. Prepare CPA designation form _ 17. Communicate with out—of—state counsel for ancillary proceedings _ 18. Prepare and file parent-child exclusion application __ 19. Determine need to start court proceedings and prepare petitions _ 20. Prepare documents to collect non-trust assets _ 21. Corporate review and housekeeping for closely held corporations
  27. 27. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse’s Death Page 9 of 12 _ 22. Communicate with CPA D. Step Four: Second Meeting with Client (and CPA) _ 1. Verify trust checking account established _ 2. Review c| ient’s record-keeping _ 3. Discuss progress on collection and appraisal of assets _ 4. Discuss possible sales of assets a. Determine need for liquidity b Consider preference for cash versus in—kind distributions c Review authority of trustee to sell d. Consider tax consequences of sale e Discuss method of sale f Watch for conflict of interest _ g. Consider obtaining court approval _ 5. Consider preliminary distributions _ a. Consider income tax effects _ b. Beware disproportionate preliminary distributions _ c. Consider liquidity needs, potential creditor claims and challenges to trust _ 6. Prepare and send letter to CPA confirming allocation of responsibilities E. Step Five: Final Distribution _ 1. Finalize asset collection __ 2. Finalize fiduciary accounting schedules _ 3. Determine administration expenses incurred _ 4. Decide whether to take administration expenses on IRS Form 706 or 1041 _ 5. Finalize and file IRS form 706 (no California form) state estate tax returns _ 6. Draft final account and report of trustee _ 7. Determine if court approval of accounting appropriate _ 8. Consider income tax effects _ 9. Determine if any distributions carry earned income or interest _ 10. Determine amount of reserve __ 11. Determine amount of trustee’s fee
  28. 28. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse’s Death Page 10 of 12 _ 12. Plan asset allocation among subtrusts a. Consider timing Consider prorata or Non-prorata Select allocation (distribution) date Obtain asset values and loan amounts as of allocation date b c d e. Complete asset allocation spreadsheet f Use segregated trusts or bookkeeping entries? g Surviving spouse’s income needs h Appreciating assets i. Consider basis step-up at second death _ j. Family residence k. Vacation home I. Loans to children Assets subject to options or guaranties S corporation stock IRC §303 stock m n o. IRD items P q Retirement benefits __ r. Closely held business or nonproductive real estate _ s Special use valuation property (IRC §2032A) _ t Discount planning __ u. Unmatured life insurance _ v Dividend reinvestment accounts _ 13. Prepare asset allocation agreement _ 14. Prepare written schedule of assets for ongoing trusts _ 15. Obtain T| Ns for ongoing trusts _ 16. Prepare certificates of trust for ongoing trusts _ 17. Prepare diagram of distribution _ 18. Send drafts of spreadsheet, asset schedules, and diagram to client and CPA
  29. 29. LAW OFFICES GIVNER & KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse’s Death Page 11 of 12 19. 20. 23. 24. 25. Consider review of distribution plan by beneficiaries Consider court approval of distribution plan Obtain trustee’s and CPA’s approval of distribution plan Prepare transfer documents for funding distributions Written instructions to trustee regarding title to bank accounts Deeds, etc. Note: get endorsement on title insurance policy or coverage may be | ost! ! Assumption of mortgages Assignments of lease Assignments of notes and deeds of trust Prepare and file UCC-2 statements Cancel old and issue new stock certificates for closely held corporations Assignments of partnership interests Assignments of unsecured promissory notes Letters to makers of notes advising of assignment Assignments of assets of sole proprietorship Assignments of personal property Forms to complete transfer of mobile homes Stock powers, affidavit of domicile, and letter of instructions for stock transfers Letters to transfer agents or deliver certificates to broker for transfer Letters of instructions to broker to transfer securities accounts Letters of instructions to mutual fund companies for transfer of accounts Transfer forms for treasury notes and bonds Letter and forms for transferring U. S. savings bonds Complete transfers of vehicles (cars, boats, airplanes) Miscellaneous assignments for other Assets Prepare waivers of accounting if formal account required but not given Prepare beneficiary receipts for outright distributions Mail accounting, distribution checks/ documents, and receipts by certified mail, if necessary
  30. 30. LAW OFFICES GIVNER 8: KAYE A PROFESSIONAL CORPORATION February 12, 2014 Checklist After First Spouse’s Death Page 12 of 12 _ 26. Prepare letter of instructions to client regarding administration of on-going trusts __ 27. Prepare letter to CPA regarding on—going trusts and allocation of responsibility for tax and accounting work _ 28. Send closing packet and termination of engagement letter to client 29. For a checklist for implementing subtrust allocation and funding and completion of administration for married person trusts that divide at the first death, see §14.83 30. Send client satisfaction survey form to client

×