“Estate planning is not just about taxes — it is also about family.”

Principal Office:

600 W. 6th Street

Suite 300

Fort Worth, TX 76102

 

Office: 817.877.2885

Fax: 817.333.2985

teleice@earthlink.net

nice@canteyhanger.com

Resource Library

Master List of Articles

Additional Services

2014 - IRA-QPs Investing in Closely Held Business

Browse Article  |  View as PDF

 

This is the latest iteration of an article 25 years in the making. The article is a high-level discussion of the many, many complex issues that can arise if an IRA or qualified plan invests in something other than conventional publicly traded stocks and bonds. It covers issues such as real estate investments, investing in employer stock, investing in an LLC or partnership. Covered are the prohibited transaction issues, self-dealing prohibitions, unrelated business taxable income, ESOP issues, etc.

 

2013 – Estate Planning After the 2013 ATRA TBCA

Browse Article | View as PDF

 

2012 – Approximate Cost of Various Estate Planning Documents

Browse Article | View as PDF

 

A touchy subject this. I commit to prove true the adage that you do get what you pay for. I am not the cheapest attorney in town, nor am I the most expensive. I try to charge a reasonable fee for a reasonable service. I represent all range of clients from $1 million to over $100 million. Keeping the cost of estate planning affordable is quite a challenge if the job is going to be done right.

 

2012 – List of Basic Estate Planning Documents With Explanation of Purpose

Browse Article | View as PDF

 

This is another memo that is set in a tabular form, discussing over a dozen estate planning documents that are common for even a small estate.

2012 – The Minimum Distribution Rules Affecting IRAs and Qualified Plans

(QSPs) in a Nutshell

Browse Article | View as PDF

 

This is the latest iteration of a memo designed for clients who want to understand how the minimum required distribution (MRD or RMD) rules work under IRC 401(a)(9). It was last prepared for a State Bar of Texas Professional Development Seminar "Advanced Estate Planning Strategies" course held in April of 2012 in Santa Fe, NM, where I was a panelist with Prof. Thomas Featherston, Alvin Goldin and Stephanie Donoho. The subject of the panel was community property and so this version of the Memo has an article added that discusses community property laws as applied to IRAs and other retirement benefits, and which discusses in particular problems planners face when they seek to fund a bypass trust with a community property IRA. A possible solution to this thorny problem is proffered and discussed.

2011 - ABA Creditor Claims & Conflict Laws IRAs SEPs

Browse Article  |  View as PDF

 

This was a paper submitted at a National ALI-ABA webinar. Al Golden was my co-panelist. The subject covered is not one you find much written about. I wrote it because it seemed that no one else had already done so.

 

There is not much literature on Simplified Employer Plans (SEPs), nor are they well understood. Generally, the employer signs a simple IRS prepared form that is about two pages long. It is not uncommon for the form to never be read by anyone. This is understandable in the case of a 150 page defined benefit plan, but not here. The way a SEP operates is that the employer makes a uniform contribution as a percentage of salary to the individual IRAs of each participant. The SEP is probably subject to ERISA. Are the IRAs subject to ERISA? If so, the anti-alienation provision of ERISA that applies to qualified plans do not apply to the SEP, for reasons explained in the article. However, what about the individual IRAs. They might be covered by a state law exemption for IRAs. If so, is the state law exemption preempted. What if the SEP is one state, the IRA owner in another, and the SEP-IRA in a third. Which law governs? These and other issues are discussed in this article.

 

2011 – Drafting Where the Only Thing Certain is Change and Litigation

Browse Article  |  View as PDF

 

This article was prepared for the 2011 State Bar of Texas Professional Development Program "Advanced Drafting for Estate Planning and Probate." It contains a number of specimen Will and Trust clauses, with comments to them, designed to minimized abusive litigation.

2011 - MRD Final Regs Annotated 1.401(a)(9)

Browse Article  |  View as PDF

 

This is well over 100 pages. The regulations themselves are around 100 pages. I added comments (annotations) to those provisions I found interesting and worth commenting upon. There are 257 of such instances.

2010 - Trusts as Beneficiaries of IRAs and Qualified Plans (Proposed Clarification of MRD Regulations)

Browse Article  |  View as PDF

 

What a problem. And it has been with us for over a quarter century now! Why can't the IRS tell us what the rules are? This was a Draft Proposal to IRS Requesting Clarification of the Regulations on the application of the minimum required distribution rules applicable where a trust is the beneficiary of an IRA or other Retirement Plan.

 

This was prepared in 2010 as a draft of a proposal, which was never sent to the IRS, regarding the uncertainties in applying the minimum required distributions (MRDs) from trusts that are the beneficiaries of death benefits from an IRA or qualified plan. In it, I analyzed all the private letter rulings on this issue.

 

2010 - Memo to Client “What You Should Know Before Making a Disclaimer”

Browse Article  |  View as PDF

 

A qualified disclaimer is a technique whereby the recipient of a gift, usually under a will or trust, renounces his or her interest in the gift. This would ordinarily be subject to the transfer tax system, but if a number of formal documentary, notice, delivery and timing conditions are met IRC Sec. 2518 provides that the renunciation will not be treated as a gift. This can therefore be a very valuable technique that avoids transfer taxation. For instance, if property is passing to a parent, and the parent has a will leaving the property to the children, a disclaimer by the parent gets the property to the children without being taxed in the parent's estate. Of course, the parent cannot gives up the use of the property, but maybe the parent doesn't really need it.

2009 - Nutshell UPIA Memo to Client

Browse Article  |  View as PDF

 

There are two UPIAs, which is confusing: the Uniform Principal and Income Act and the Uniform Prudent Investor Act. I call the former the UP&IA, and the latter UPIA, but most people call both UPIA. They have recently been adopted in one form or another in most states, and anyone who is establishing or administering a trust simply has to know something about them both. They are very important. This article give a good overview.

 

2009 – What Every Individual Acting as Trustee Should Know About the New Uniform Prudent Investment and Principal Income Acts

Browse Article | View as PDF

 

There are two UPIAs, which is confusing: the Uniform Principal and Income Act and the Uniform Prudent Investor Act. I call the former the UP&IA, and the latter UPIA, but most people call both UPIA. They have recently been adopted in one form or another in most states, and anyone who is establishing or administering a trust simply has to know something about them both. They are very important. This article give a good overview.

2008 - Nutshell Executor Fees Commissions

Browse Article  |  View as PDF

 

I note that the law has recently changed, which requires an update to this Memo, which update will be completed shortly. In the meantime, it should still be useful.

2008 – Grantor Trusts Including GRATS

Browse Article | View as PDF

Long, long ago (when I began practicing law), trusts were taxed at rates more favorable than that of individuals. It was all the rage to set up trusts to save on income taxes. Following a common pattern, legislation was enacted that ignored certain trusts (called "grantor trusts') for income tax purposes. The IRS used its regulatory authority to keep trusts from being taxed separately by liberally interpreting the statute. Then things changed. Now trusts are taxed at higher rates than individuals, at least at lower income levels. So, creative tax practitioners began to deliberately make trusts subject to the grantor trust rules. Further, it was discovered that a gift to an irrevocable trust could be made complete for gift tax purposes, and yet still be subject to the grantor trust rules, which meant that the grantor paid the trusts income taxes. Is the payment of the trusts income taxes a taxable gift to the trust? Apparently not. Thus was born the IDIGIT, the intentionally defective grantor trust.

2007 - Guide to the Personal Representative (PR) (or executor) on Paying Debts, Expenses & Taxes Existing at Death and During the Period of Administration

Browse Article  |  View as PDF

 

2007 – Valuation For Funding and Distribution Purposes, In Kind Distribution and “Appropriate Interest” on Pecuniary Gifts

Browse  Article | View as PDF

 

When an in-kind distribution is made in satisfaction of pecuniary gift (a gift of a dollar amount), or if a non prorata distribution is made of a percentage interest in the residue of an estate, there will be questions about how to value the property distributed, and what to do about appreciation and depreciation between the time the trust was funded or the date of death of a decedent and the date of distribution. Actually this subject is every bit as important as it is arcane. It is both. Usually, the fiduciary (executor or trustee) will have to either pay interest on a pecuniary gift (determined how?) or allow the gift to share in appreciation or depreciation. Also, there is the question of whether or not gain or loss is recognized by the estate or trust on the distribution. Until you read the Will or Trust and consult state law on the subject you won't know the answers to any of these questions. This article should be of some help in understanding the issues.

 

I include this Article on the litigation page because if you don't follow the rules, you will be inviting litigation. And, after several years have transpired between, say, a decedent's death and the satisfaction of a legacy, the question of how to value the property distributed to a legatee in satisfaction of the legacy, as well as the question of whether the legatee is entitled to in interest (and if so how much) can make a huge economic difference to the legatee.

2007 – Paying Debts Allowances and Taxes and Satisfying Gifts Under The Will:

A Guide To The Independent Executor

Browse Article | View as PDF

 

Guide to the Personal Representative (PR) (or executor) on Paying Debts, Expenses & Taxes Existing at Death and During the Period of Administration.

2006 - ESOPs in a Nutshell

Browse Article  |  View as PDF

 

2006 – Estimated Tax Apportion Prob. Code Sec. 322A

Browse Article  |  View as PDF

 

Your Will gives different property to A, B and C. D gets a $1 million pecuniary (cash) legacy, which can be satisfied in cash of in kind. The remainder of your estate goes to E. The estate tax is $2 million. Who pays it, A, B, C, D or E? Some of them? All of them? In what proportions?

2006 - Who Inherits If No Will Intestacy in Texas

Browse Article  |  View as PDF

 

Here is a diagram that I have to refer to myself from time to time.

 

2005 - 42.0021 Creditor Protection of IRAs In Texas

Browse Article | View as PDF

 

2005 - Community Property in a Nutshell

Browse Article  |  View as PDF

 

Short. Handy, but obviously incomplete. A treatise would not do the job entirely. I think this is a nice compromise. As is the case everywhere on this website, do not rely on it. That is what attorneys are for. An attorney can take a specific situation and apply the law, or such law as there is. All I can do here is set forth some general principles.

 

2005 - Computers & Law Office Economics

Browse Article  |  View as PDF

 

A feeble attempt by me to address the issue indicated by the title.

2005 - Estate Taxation of Annuities and Lottery Benefits, the Booby Prize

Browse Article  |  View as PDF

 

A version of this article was published in Estate Planning Magazine. I co-authored it with Bob Goff, an outstanding attorney from Witchita Falls. We had both represented clients who had won the lottery and we both knew of a little discussed problem: the estate tax can exceed the value of the annuity, and that is only part of the problem.

2005 - What You Should Know About Public Charities as Distinguished

From Private Foundations

Browse Article  |  View as PDF

 

This is a "simple" memo in question and answer table form.

 

2005 - What You Should Know About Your GRAT

Browse Article  |  View as PDF

 

GRATS are a special kind of grantor trust. GRAT is the acronym for Grantor Retained Annuity Trust. Under such a trust, the grantor establishes an irrevocable trust for his or her beneficiaries, and retains the right to an annuity for a term of years. The value of the annuity is subtraced from the value of the gif of the remainder. Values are determined under rates that are published monthly and are designed to be reflective of the true economic value of the annuity at the time the trust is established. Say, you put $10 million in a trust and retain the right to an annuity of $200,000 per year for 10 years. The value of the remainder is zero, and probably will be zero. But what if you invested the trust in Wal-Mart stock at a time when it was trading for $10 a share, and during the third year of the trust the value went to $1000 a share and stayed there. Then the remainderpersons would get a large gift with no transfer tax associated with the transfer at all.

 

Can you see why GRATs are popular? Can you see why future legislation restricting the use of GRATs might be inacted? Acting quickly to take advantage of this technique while you can could be a good idea.

 

2004 - Creditor Claims In Probate

Browse Article | View as PDF

 

The law has changed since this article was written, but the article is nonetheless still of some use and is not entirely out of date.

 

2004 - EP QPs & IRAs - Article 1: Preliminaries Nomenclature

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 2: Survivor Benefits Under The Retirement Equity Act

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 3: Community Property

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 4: Probate Issues

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 5: Creditor Issues

Browse Article  |  View as PDF

 

This area of the law is very esoteric. But it is equally very important. In most, but not all, cases, your IRA and qualified retirement plan is an exempt asset under state or federal law.

 

2004 - EP QPs & IRAs - Article 6: Estate Tax Issues

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 7: Income Tax Issues

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 8: Excise Tax Issues

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 9: Controlling Timing and Form of Distributions 411(d)(6)

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 10: In-Services Distributions

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 11: Prohibited Transactions & Loans

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 12: QDROs

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 13: Marital and Community Property Issues IRAs and Qualified Plans

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 14: What is an IRA Under State Law?

Browse Article  |  View as PDF

 

2004 - EP QPs & IRAs - Article 15: Appendixes and Forms

Browse Article  |  View as PDF

 

2004 - UPIA Drafting Thoughts

Browse Article  |  View as PDF

 

2004 – What You Should Know About Your Family Limited Partnership

Browse Article | View as PDF

 

This is another article following the tabular question and answer format.

2003 - 42.0021  Creditor-Protection Of IRAs In Texas

Browse Article | View as PDF

 

This is a subject that continues to evolve.

2003 - Administering The Potentially Insolvent Estate

Browse Article | View as PDF

 

The law has changed since this article was written, but the article is nonetheless still of some use and is not entirely out of date.

 

2003 – Drafting Wills and Trusts from an Income Tax Perspective A Panoply of Forms

Browse  Article | View as PDF

 

This article contains what I consider to be a rather sophisticated discussion of some important, if abstruse, rules governing the income taxation of estates and trusts.

2003 - Exempt Property & Probate Allowances

Browse Article | View as PDF

 

The title is self-explanatory. There are some assets that cannot be reached by creditors during life, and some that cannot be reached at death, and some that cannot be reached in either case. The rules, however, are different at death, because the law provides that the family is entitled to certain allowances, including the right to occupy the homestead, and those rights can come ahead of other creditors, and even trump expenses of administration in some cases.

 

2003 - Roth IRAs

Browse Article | View as PDF

 

Your Roth IRA should be an exempt asset too, although this was altogether clear for a while.

2002 - ACTEC; A Document Assembly System Using MS Word's Mail Merge Feature and a Database

Browse Article  |  View as PDF

 

You don't really need a database. You can you a table with fieldnames in the first row, with the corresponding data in rows to follow. I enter a client's data in FileMaker Pro, which beats Access hands down for stability and ease of use. I apply the data to various layouts used as templates, and take full advantage of the relational power of this database, so that I have several databases accessing data from each other. Being me, my document assembly system is very complicated, but it doesn't have to be. I have just gotten good at it, and can program on the fly. Also, I seldom use commercial document assembly systems, because, though I have tried many, none is sufficiently sophisticated for the work I do. Buy WillMaker if you don't want to pay an attorney to craft a real estate plan for your family.

2002 - What You Should Know About Your Private Foundations

Browse Article | View as PDF

 

This is a "simple" memo in question and answer table form.

 

2001 - Charitable Remainder Trusts

Browse Article | View as PDF

 

This is a "simple" memo in question and answer table form, describing a technique whereby property is placed in trust with the grantor retaining an annuity or unitrust income, remainder to charity. The trust itself is tax exempt, though distributions are not necessarily so. A charitable gift tax deduction is allowed during life and a charitable estate tax deduction at death. In addition, a charitable income tax deduction is available for the value of the remainder interest dedicated to charity.

 

2001 - Conduit Private Foundations

Browse Article | View as PDF

 

This is an interesting type of charitable private foundation.

 

2001 - 140 Do’s & Don’ts – Planning For IRAs & QPs

Browse Article | View as PDF

 

This is a list worth reviewing, if only as a memory jog. Still relevant after all these years.

 

2001 - Outright Gifts to Charity

Browse Article | View as PDF

 

This sounds simple enough, but, in fact, if certain documentation is not obtained within prescribed periods, you will not be entitled to a charitable income tax deduction.

 

2000 - Computers in Your Practice Fin De Millenium

Browse Article  |  View as PDF

 

A feeble attempt by me to address the issue indicated by the title.

1999 - Annotated Annual Withdrawal Trust (Crummey Trust)

Browse Article  |  View as PDF

 

This is a very popular type of trust. It is primarily used as a means of making gifts of the annual gift tax exclusion amount to a trust, without having the gift taxed or counted against your applicable death tax exclusion. It is very common to have this type of trust invest in life insurance with the annual gifts used to pay the premiums. The tax treatment of these trusts is very convoluted and often uncertain, and keeping one of these trusts qualified takes some work. I drafted a model trust, and then annotated it with footnotes explaining why the provisions in it are there and what tax issues are associated with them. I am somewhat proud of this article, and it is not that far out of date, despite having been prepared for a State Bar of Texas Professional Development Seminar in 1999.

1997 - Problems Involving The Use Of Disclaimers

Browse Article | View as PDF

 

There are two UPIAs, which is confusing: the Uniform Principal and Income Act and the Uniform Prudent Investor Act. I call the former the UP&IA, and the latter UPIA, but most people call both UPIA. They have recently been adopted in one form or another in most states, and anyone who is establishing or administering a trust simply has to know something about them both. They are very important. This article give a good overview.

Board Certified: Estate Planning & Probate Law by

the Texas Board of Legal Specialization since 1983

These materials are not meant to and may not be relied upon, but are published for discussion purposes only.  Rule 7.04(b) disclosures.

© 2013-2014 TrustsandEstates.net All photos on this site by Noel C. Ice.