Estate of Fields – A Limit on “Death Bed” Estate Tax Planning

If you anticipate that you will be subject to Federal and/or state estate tax liabilities, the time to begin gifting or other “estate tax planning” strategies is well before you are in a “death bed” situation. You should not wait to be in your own “death bed” situation before you commence proper estate tax planning. The use of limited partnerships and limited liability companies to claim “valuation discounts”, and reduce estate tax liabilities, has been a longstanding practice in estate tax planning. However, the Estate of Fields opinion is authority that it can be very difficult to achieve a “valuation discount” in a “death bed” situation.

Transferring Your Asset Protection Structure to the Next Generation

While we may not expressly consider asset protection for our children, transferring an asset protection structure to your children is consistent with the objective of estate planning. This concept of transferring your asset protection structure to the next generation derives from the view that an established asset protection structure has value. If you transfer your asset protection structure to the next generation, you continue this “investment” to provide value for the next generation. You save your children the legal fee and filing fee costs that they would otherwise need to incur to create their own asset protection structure.

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United States v. Huckaby – Domestic Asset Protection Trusts and Real Estate

At its root, the Huckaby case concerns what state law should be applied to real estate owned in a trust – the law where the real estate is located or the law by which the trust is to be administered. If you are trying to implement asset protection for real estate located in a “non-DAPT” or otherwise “non-asset protection favorable” state, you should consider the possible benefit from a “real estate – personal property” conversion approach.

In the Matter of the CES 2007 Trust – A Victory for the Delaware Domestic Asset Protection Trust

Among the many tools available for persons seeking asset protection is the “domestic asset protection trust” (the “DAPT”). Broadly speaking, DAPTs are U.S. domestic trusts established by a grantor, who generally retains certain rights over the trust, but wants the assets of the trust to be protected from creditors.