Tax, Trusts and Estates

Business Succession Planning

Closely-held business owners and professional practices face tax, legal and other challenges when working to pass a business to family members or the next generation of owners, whether they be partners, key employees or third party purchasers. The collective experience of the Firm’s trusts and estates planning, corporate, real estate, franchise and employment law groups makes Price, Meese, Shulman & D’Arminio, P.C. fully adept at guiding our clients and their other advisers, through all aspects of the business succession planning process.

Whether an owner’s intended plan is the successful transfer of the business or practice at death or retirement, or a liquidating stock or asset sale, the Firm’s years of experience employing a multi-disciplinary approach affords our clients with comprehensive business, employment, real estate, estate and tax law services, including:

  • Implementing shareholder, partnership and limited liability company agreements
  • Drafting and implementing compensation arrangements between business owners and key employees
  • Designing buy-sell and restrictive stock agreements
  • Strategic planning including estate planning, tax reduction strategies and estate and gift tax implications of gifts or sales of business interests
  • Restructuring entities, coordinating mergers and acquisitions, and implementing recapitalizations, including the use of preferred interests or voting and non-voting stock
  • Drafting life insurance trusts and corporate split-dollar agreements
  • Updating business owner estate plans to be coordinated with the succession plan and accounting for equalization of Inheritances among other beneficiaries where intended
  • Implementing income tax-deferred like-kind exchanges and reverse 1031 exchanges, and advising on the reinvestment of sale proceeds in replacement properties, Delaware Statutory Trusts or Qualified Opportunity Zone investments
  • Advice as to obtaining the benefit of Section 1202 stock

Estate Planning

Our trusts and estates planning attorneys help the Firm’s clients implement flexible plans to protect and preserve their assets and businesses for their families, beneficiaries and charities. As experienced professionals, we understand the myriad of technical state and federal rules and regulations impacting a broad range of subject matters, including the laws governing wills, trusts, probate, rights of surviving spouses and estate, gift, generation-skipping and inheritance taxation.

For many of our clients, estate taxation poses a significant threat to wealth preservation and business continuity. We work closely with our clients and their other advisers and help design and implement gifting programs, coordinate sale or valuation freeze techniques and implement tax-efficient plans and sophisticated trusts to reduce or eliminate estate tax exposure.

Although tax minimization strategies are frequently a consideration, tax issues often do not take precedence over a client’s overriding personal concerns for the welfare of his or her family and beneficiaries. The execution of a well-designed and drafted power of attorney, advance healthcare directive and will is critical to all of our clients so that their intentions are fulfilled and their beneficiaries are protected.

For those clients who are charitably inclined, our attorneys have significant experience advising clients on charitable income and estate tax reduction strategies and the designing of charitable trusts. Our attorneys advise clients as to the formation of private foundations and other types of charitable entities and serve as corporate counsel, advising non-profits on tax and compliance matters.

The estate planning client who owns a closely-held business, especially one which is subject to transfer restrictions imposed by a shareholder or franchise agreement, requires advice from sophisticated counsel who understands the complex issues involved. Our firm employs a multi-disciplinary approach among the Trusts and Estates group and our Firm’s corporate and franchise law attorneys when advising these clients. Our attorneys have extensive experience with entity recapitalizations, the drafting of Operating Agreements and shareholder agreements and the implementation of succession plans which satisfy governing transfer restrictions imposed by either a shareholder or franchise agreement. Cooperation among the advisors helps ensure that a client’s estate and corporate documents are coordinated to achieve the desired business succession.

For our real estate developer clients and clients who own significant real estate holdings, our Trusts and Estates attorneys work closely with our real estate attorneys, who have extensive experience with sophisticated development deals, like kind exchanges and more recently, investments in Qualified Opportunity Zones and Delaware Statutory Trusts.

Clients who have separated from a spouse or finalized a divorce should seek qualified counsel to review the impact that these issues have on their estate plans. Our Trusts and Estates attorneys have extensive experience In the field and understand the statutory right of elective available to a surviving spouse, the rights of a pretermitted spouse and the Spousal Waiver rules applicable to qualified plans governed by ERISA. We frequently assist clients in the implementation of estate plans during the pendency of a divorce or post-divorce. Our Trusts and Estates attorneys also consult with our family law attorneys on tax and trust issues incident to the terms of premarital or post-marital agreements which our firm’s attorneys are preparing. It is critical that any client who has signed a premarital or post-marital agreement provide the document to estate planning counsel to ensure that the client’s asset titling, estate planning documents and beneficiary designations all comply with the terms of the marital agreements.

Comprehensive Tax Planning Advice

Our experienced attorneys counsel the Firm’s clients on tax issues incident to the trusts and estates planning process, including federal and state estate taxation, federal gift and generation- skipping transfer taxes, income and capital gains taxes, the New Jersey Transfer Inheritance Tax and tax issues impacting pass-through entities such as limited liability companies, partnerships and subchapter S corporations.
Techniques and strategies often employed by our tax planning attorneys include:

  • Domicile planning
  • Design and funding of Grantor trusts
  • Sales transactions with Grantor trusts
  • Gifts to Donor Advised Funds, private foundations and charitable trusts
  • Intra-family loans and sales
  • Advice as to basis shifting mechanisms for assets held in trusts
  • Grantor Retained Annuity Trusts
  • Qualified Personal Residence Trusts
  • Like-kind exchanges
  • Qualified Opportunity Zone investments and Delaware Statutory Trusts
  • Private annuities
  • Self-cancelling installment notes

In addition to tax planning advice, our trusts and estates attorneys are also experienced in handling tax disputes in administrative forums, whether in the nature of estate and gift tax audits, administrative appeals of tax determinations or the prosecution of claims in Tax Court.

Trusts and Estates Administration

Accepting the nomination to serve as personal representative, administrator of an intestate estate. executor or trustee is a significant undertaking which poses a potential for significant personal liability. Our experienced team of attorneys and paralegals have extensive experience counseling fiduciaries in significantly complex matters, as well as routine trusts and estates. Without exception, every fiduciary should consider engaging qualified counsel to advise and assist them as they undertake to discharge their fiduciary responsibilities in a timely and prudent manner.

Although each trust or estate is unique, quality representation of a fiduciary follows a similar course of action. The initial phase of representation addresses emergent issues. Preliminary advice focuses on the fiduciary responsibilities undertaken, tax filing and tax payment deadlines, an analysis of the Prudent Investor Rule, assessment of the volatility of assets under management and the development of a plan designed to meet liquidity needs, and the efficient administration of the trust or estate. Many trust and estate administrations involve a collaborative effort among counsel, the fiduciary and the fiduciary’s other advisers, including accountants and investment advisers.

The primary role of estate or trust administration counsel is to guide the fiduciary through the myriad of procedural, legal and tax obligations inherent in every estate or trust administration. We counsel fiduciaries until such time as the fiduciary is discharged by either an agreement of all interested parties or in infrequent instances, by order of a court approving a formal accounting. In any matter where it is claimed that a fiduciary has breached a duty of care owed to the beneficiary of the trust or estate, our Firm employs a multi-disciplinary approach and our trusts and estates and litigation groups work closely together to defend the fiduciary.

Our experienced attorneys have extensive experience preparing estate, gift and generation-skipping transfer tax returns. Our attorneys also have considerable experience defending positions taken in such returns before the IRS and state tax authorities and where required, handling appeals of adverse determinations in administrative forums or Tax Court.

Probate and Trust Dispute Resolution and Litigation

Disputes often arise in the area of trusts and estates. In an instance where a testator or the settlor of a trust lacks sufficient mental capacity, or when there is undue influence asserted, a beneficiary or interested party can challenge the validity of a will or trust. Claims also arise when parties seek to reform a document on the theory that it is contrary to the intentions of the testator or settlor.

Claims can be asserted against a fiduciary when the fiduciary does not prudently manage the assets of an estate or trust or otherwise comply with the terms of the governing instrument. Claims can also arise when the fiduciary fails to act in the best interest of the beneficiaries because of a conflict of interest or when the fiduciary receives excessive compensation, neither authorized by law or the terms of the governing document.

Our extensive experience in this area gives us the ability to effectively counsel both fiduciaries and beneficiaries when disputes arise. Our firm employs a multi-disciplinary approach in such matters and our tax, trusts and estates and litigation groups work closely together to guide our clients through a myriad of complex tax issues, procedural rules and sophisticated documents underpinning such claims. Our trusts and estates attorneys will also partner with our family law group when there is a pretermitted spouse (disinherited by a premarital will), or a surviving spouse does not receive a statutory elective share or the distribution mandated by a premarital or post-marital agreement.

The Firm’s attorneys have considerable mediation experience, and when possible, seek alternative dispute resolution. In those instances where mediation or settlement is not a viable option, our experienced team will file claims in court to effectively enforce a beneficiary’s rights or defend a lawsuit brought against a fiduciary.

Fiduciary Counseling and Accountings

Our trusts and estates planning group counsels executors and trustees as to their fiduciary responsibilities. In instances where the beneficiary will not accept an informal accounting or when a charitable beneficiary is involved, the fiduciary must produce and file a formal accounting with the court, and serve the accounting on the beneficiary or the applicable Attorney General’s office. A formal accounting must comply with the governing court rules and the complex statutes governing the receipt and distribution of principal and income. Our attorneys, and the paralegals who support them, have considerable experience preparing and filing formal court accounting, challenging inadequate accountings and defending challenges made to a filed accounting.

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