Estate Planning for Unmarried Adults Seminar Materials
TABLE OF CONTENTS
I. Introduction
II. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act
of 2010
A. Estate Tax
B. Gift Taxes
C. Generation Skipping Transfer (“GST”) Tax
III. Ethical Issues of Joint Representation
A. Separate Representation
B. Separate Simultaneous Representation
C. Joint Representation
D. Intermediary Representation
E. Documentation of Form of Representation in an Engagement Letter
IV. Same-Sex Marriage and The Defense of Marriage Act
A. The Defense of Marriage Act
B. Federal Legislation
C. Challenges to DOMA
1. In re Golinski
2. Gill v. Office of Personnel Management and Massachusetts v.
United States Department of Health and Human Services
3. In Re Marriage Cases; Perry v. Schwarzenegger
4. Windsor v. United States
5. Recent Federal Developments
D. Comity
V. Civil Union, Domestic Partnership, Designated Beneficiaries and Reciprocal
Beneficiaries
A. Marriage and Recognition of Marriage
B. Common Law Same-Sex Marriage
C. Same-Sex Marriage and Legal Relationships in Selected Jurisdictions
1. California
2. Connecticut
3. Hawaii
4. Massachusetts
5. Washington
D. Dissolution of the Same-Sex Marriage
VI. Income Tax and Other Tax Ramifications of Same-Sex Marriage, Domestic
Partnerships and Civil Unions
A. Joint Return Filing
B. Commuting Community Property to Separate
C. State Income Tax Returns
D. No Federal Tax Exemptions Upon Separation, Dissolution or Death
E. Head-of-Household Status
F. Dependency Exemptions
G. Mortgage Interest Deductions
H. Obligation of Support
I. Adoption Credits
J. Taxation of Domestic Partner Benefits
VII. Federal Preemption, Federal Benefits and Federal Programs
A. Background
B. Non-Spouse Rollover Provision for Retirement Plans
C. Defined Benefit Plan Survivor Annuities
D. QDROs
E. COBRA
F. Social Security
G. Domestic Partner Employee Benefit Hardship Withdrawals
H. Flexible Spending Accounts and Health Savings Accounts
I. Family and Medical Leave Act (FMLA)
J. Bankruptcy
VIII. Wills, Revocable Trusts, and Nonprobate Transfers
A. Wills and Revocable Trusts
B. Revocable Trusts
C. Beneficiary Designations
D. Miscellaneous Considerations and Definitions
1. Partner
2. Parent and Child
E. Tax, Debt and Expense Allocation
F. Drafting for the Marital Deduction
IX. Planning for Personal Needs
A. Durable Powers of Attorney and Guardianship
B. Medical Powers of Attorney
C. Health Care Directives
D. Mental Health Directives
E. Physicians Orders for Life Sustaining Treatment
F. Death With Dignity Directives
G. Ethical Wills
H. Burial, Cremation and Funeral Instructions, and Organ Donation
1. Disposition of Remains
2. Anatomical Gifts
I. Medicare and Medicaid
X. Cohabitation Agreements and Related Arrangements
A. Background
B. The Law in the Absence of a Written Agreement
C. Drafting Cohabitation Agreements
1. Recitals
2. Disclosure of Assets and Liabilities
3. Expenses While Living Together
4. Dispute Resolution
5. Parenting
6. Assisted Reproductive Technology
7. Marriage
8. Termination of the Relationship/Death
9. Choice of Law
10. Severability
XI. Forming a Family, Parenting Arrangements
A. Adoption
B. De Facto Parentage
XII. Federal Tax Consequences of Federal Non-Recognition and Resulting Planning
Opportunities
A. Defining the Rights of Unmarried Partners to Jointly Owned Property
1. General Federal Estate and Gift Tax Considerations
2. Indirect Gifts Arising From Pooled Expenses
3. Joint Tenancies
4. Alternatives to Joint Tenancies
B. Adult Adoption
1. Purpose of Adult Adoption
2. Estate Planning Opportunities Following the Adoption of a Partner
– Transfers of a Trade or Business
C. Planning in Light of the Generation-Skipping Transfer Tax
D. Partnerships and Limited Liability Companies
E. Life Insurance
1. Insurable Interest
2. Income and Estate Tax Consequences of Life Insurance
3. Irrevocable Life Insurance Trusts
4. The Mechanics of the Irrevocable Life Insurance Trust
5. The Transfer of a Preexisting Policy
6. Using Partnerships and LLCs With Life Insurance
7. Private Split-Dollar Life Insurance Arrangements
8. Viatical Settlement
F. Estate Freezes and Planning Under Chapter 14
1. Purpose of Chapter 14
2. Section 2701 – Transfers of Interests in Corporations and
Partnerships
3. Section 2702 – Transfers in Trust
4. Section 2703 – Valuation of Restrictive Agreements
G. Miscellaneous Strategies To Transfer Wealth Between Partners
1. Annual Exclusion and Similar Gifts
2. Sale to Recognize Loss
3. Hiring a Partner as an Employee
4. Installment Sales
5. Private Annuities
6. Stock Redemptions
7. Retirement Benefits
8. Transfer on Death Accounts/Deeds and Community Property
Agreements
9. Section 1031 Exchanges
XIII. Charitable Planning
A. Charitable Remainder Trusts
B. Charitable Lead Trusts
C. Charitable Gift Annuities
D. Pooled Income Funds
E. Charitable Gifts of Remainder Interests in Personal Residences and Farms
F. Simple Wills and Disclaimer Planning
XIV. Estate Planning for the Transgender Client
A. Name Change
B. Change of Gender Identifier on Various Documents
C. Tax Considerations
D. Marriage
E. Practice Pointers
XV. Strategies to Minimize Conflict
A. In Terrorem Clauses
B. Statement That Omission of a Family Member Is Intentional
C. Evidence of the Client’s Capacity at the Time of Execution
D. Periodic Re-Execution of Estate Planning Documents
E. Maintain Standardized Procedures
F. Confirm Intent With Respect to Nonprobate Transfers
XVI. Conclusion
EXHIBIT A: Bibliography of Internet Resources
EXHIBIT B: Chart – General Rules – Property and Income: Community or Separate
EXHIBIT C: Drafting for Assisted Reproductive Technology, Collaborative Conception and Posthumously Conceived Children
Wendy S. Goffe, Stoel Rives LLP / Seattle, WA
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