Structuring Joint Trusts in Separate Property States to Avoid Income - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Structuring Joint Trusts in Separate Property States to Avoid Income and Transfer Tax Pitfalls TUESDAY, MAY 24, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Lauren Evans DeJong, Of Counsel, Stahl Cowen Crowley Addis , Chicago, IL Melinda Merk, Senior Vice President/Region Trust Advisor , SunTrust Private Wealth Management , Vienna, VA Scott K. Tippett, Attorney, The Tippett Law Firm , Oak Ridge, NC The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 . NOTE: If you are seeking CPE credit, you must listen via your computer — phone listening is no longer permitted.

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Agenda  Community vs. Common law property overview  Community vs. Common law property overview  Tax and non-tax considerations for utilizing a joint  Tax and non-tax considerations for utilizing a joint revocable trust (JRT) in a separate property state revocable trust (JRT) in a separate property state  Gift and estate tax issues to avoid in funding and  Gift and estate tax issues to avoid in funding and administering a JRT in a separate property state administering a JRT in a separate property state  Income tax issues and potential advantages of JRTs  Income tax issues and potential advantages of JRTs 5

Community Property Law - Overview  What is Community Property?  What is Community Property?  Community . To have community property, there must be a  Community . To have community property, there must be a community (typically a marriage). States differ whether the community (typically a marriage). States differ whether the community property system applies to domestic registered community property system applies to domestic registered partnerships. Nevada says yes; Wisconsin says no. partnerships. Nevada says yes; Wisconsin says no.  Nine states plus D.C. provide either civil unions or domestic  Nine states plus D.C. provide either civil unions or domestic partnerships to same-sex couples within the state: California partnerships to same-sex couples within the state: California (domestic partnerships), Colorado (civil unions), District of (domestic partnerships), Colorado (civil unions), District of Columbia (domestic partnerships), Hawaii (civil unions), Illinois Columbia (domestic partnerships), Hawaii (civil unions), Illinois (civil unions) Maine (limited domestic partnerships), Nevada (civil unions) Maine (limited domestic partnerships), Nevada (domestic partnerships), New Jersey (civil unions), Oregon (domestic partnerships), New Jersey (civil unions), Oregon (domestic partnerships), Washington (limited domestic (domestic partnerships), Washington (limited domestic partnerships) and Wisconsin (domestic partnerships). partnerships) and Wisconsin (domestic partnerships). 6

Community Property Law-Overview  The nine (9) community property states are:  The nine (9) community property states are:  Arizona  Arizona  California  California  Idaho  Idaho  Louisiana  Louisiana  Nevada  Nevada  New Mexico  New Mexico  Texas  Texas  Washington (the state not the District)  Washington (the state not the District)  Wisconsin.  Wisconsin.  Alaska* (opt-in community property state where both parties  Alaska* (opt-in community property state where both parties may make their property community property). may make their property community property).  Tennessee* (optional community property trust)  Tennessee* (optional community property trust) 7

Community Property Law - Overview  General Approach . All property of the spouses is either  General Approach . All property of the spouses is either “community” or “separate” property. Community property “community” or “separate” property. Community property comes from civil law , while separate property comes from comes from civil law , while separate property comes from common law . Under common law, title is critical for common law . Under common law, title is critical for determining ownership. determining ownership.  Separate Property . A spouse’s separate property includes:  Separate Property . A spouse’s separate property includes:  property owned or claimed by the spouse prior to marriage;  property owned or claimed by the spouse prior to marriage;  property acquired during marriage by gift or inheritance; and  property acquired during marriage by gift or inheritance; and  (in some states) recovery for personal injuries sustained  (in some states) recovery for personal injuries sustained during marriage, except recovery for loss of earning during marriage, except recovery for loss of earning capacity. capacity.  If separate property is sold or exchanged, the proceeds are  If separate property is sold or exchanged, the proceeds are also separate property , but only if the proceeds can be also separate property , but only if the proceeds can be traced to the original separate property. traced to the original separate property. 8