The second week of this year, over 3,000 attorneys and other professional met in Orlando, Florida to learn about and refresh our knowledge of the latest laws, regulations, techniques and best practices in Estate Planning and related areas of law. The presenters included the brightest and best minds in the world on the topics. I was fortunate to attend the conference and thankful for the opportunity to continue my professional development.
The weeklong event was packed with general and specialized sessions. The materials accompanying each presentation were thoughtful and rich with examples of practical implementation of ideas. Many sessions included well-reasoned opinion about the future of federal estate tax, gift tax, generation skipping tax, capital gains and basis. Thought provoking as they were, these discussions answered many questions and left others open to see how events and actions of the new administration and congress would shape them.
For instance, during the last months of 2016 the IRS proposed revisions to Section 2704 Regulations that related to discounts available on transferring assets to related parties. Much was written about the proposed 2704 regulations expected to go into effect by early 2017. Panel discussions clarified the proposed regulations are not likely to go into effect without substantial edits, if ever.
Throughout many discussions, panelists provided opinions and insight about possible repeal of federal estate taxes. After a week of opinions, it is clear, nobody knows for sure what may happen. It is likewise clear, if repeal happens, the government will likely tweak the capital gains laws to compensate for losing revenue. This possible change causes us to focus on basis; that is, the starting point in measuring your capital gain when you sell a capital asset. Various options to set and maintain basis calculations, step up basis, and modify basis were discussed.
Meanwhile, where an estate is taxable, presenters discussed the concept of hot and cold assets. Hot assets are those expected to appreciate and cold assets are those not expected to appreciate. Analyzing scenarios for electing portability, paying the tax, and structuring a portfolio for the future, we saw the impact of using hot or cold assets in each.
Protecting assets for the use and benefit of future generations was a constant theme throughout the conference. The primary vehicle to deliver these protections were properly drafted and funded trusts. The techniques and provisions recommended to accomplish asset protection and preservation are among those typically used in our office for our clients.
In discussing a married couples’ ability to double the federal estate tax exemption without substantial advance planning techniques and obtain a step up in basis for some assets of the marriage, portability discussions described who could make the election, how it could be made, where and when to make it and the limitations on the election. We also discussed post-election consequences of certain conduct.
A developing area of the law involves digital assets. Federal and state criminal laws prohibit unauthorized access of another’s digital data. These laws make it difficult to administer trusts and estates that increasingly include digital assets. Digital providers also make it difficult to obtain data and access to a deceased or incapacitated person’s accounts. Their concern is identity theft and protection of personal information. These competing views are the subject of a new uniform law named the Revised Uniform Fiduciary Access to Digital Assets Act or RUFADAA. Many jurisdictions have enacted that legislation. Others have entertained it. The Ohio State Bar Association has recommended its passage in Ohio. As of this writing, it has not become part of Ohio’s revised code yet. Google, Apple, Twitter, Facebook and others have procedures allowing users to give others access to their account. Usually these procedures are passed over quickly as part of the setup of accounts. Language added to wills, trusts and powers of attorney can assist in granted access to digital assets. We are pleased to include that language to your estate documents if you like.
These are only a few of the fascinating cutting edge topics covered at this year’s conference. We are pleased to bring that knowledge to you in the legal services we provide to our clients.