House Ways & Means Committee Passes Tax Bill With Potentially Significant Effects on Estate Planning

Written by Allan B. Cutrow and Jeffrey K. Eisen On September 15, 2021, the House Ways and Means Committee passed a tax bill designed to raise revenue for President Biden’s “Build Back Better” plan.  It contains significant changes to the estate and gift tax laws, and the income tax laws related to them.  Of course, this is only another step down a very uncertain road.  … Continue reading House Ways & Means Committee Passes Tax Bill With Potentially Significant Effects on Estate Planning

Proposed Legislation Would have a Dramatic Impact on Donor Advised Funds

Written by David Wheeler Newman The “Accelerating Charitable Efforts Act”, or the “ACE Act”, introduced on June 9th by Senators Grassley and King, would have major impacts on donor advised funds (DAFs) and private foundations. Our prior post discussed the proposed changes to the private foundation rules, and this post will discuss those affecting DAFs. Under existing law, a donor may generally claim a charitable … Continue reading Proposed Legislation Would have a Dramatic Impact on Donor Advised Funds

Proposed Legislation Would Affect Private Foundations

Written by David Wheeler Newman Senators Chuck Grassley and Angus King on June 9 announced their intention to introduce tax legislation, dubbed the “Accelerating Charitable Efforts Act”, or the “ACE Act”, that would have major impacts on donor advised funds (DAFs) and private foundations.  This post will discuss the proposed changes to the private foundation rules, and the next post will discuss those affecting DAFs. … Continue reading Proposed Legislation Would Affect Private Foundations

Administration Proposal Would Negatively Affect Tax Benefits of Charitable Remainder Trusts

Written by David Wheeler Newman Since its introduction into the Internal Revenue Code in 1969, the charitable remainder trust has been the “Swiss Army Knife” for charitable gift, financial and estate planners because of its flexible features that allow a balancing of financial planning or estate planning objectives with philanthropic objectives.  Those features include two CRT tax benefits provided in the Code – the charitable … Continue reading Administration Proposal Would Negatively Affect Tax Benefits of Charitable Remainder Trusts

Do CRTs and CLTs Need To Be Registered With the CA Attorney General?

Charitable Remainder Trusts and Charitable Lead Trusts: California Attorney General Registration Rules Written by Jeffrey Davine It is common knowledge in the nonprofit community that a charitable entity operating in California is required to register with the California Attorney General.  The initial registration is accomplished by filing Form CT-1 with the California Attorney General and paying the registration fee.  The Form CT-1 should be filed … Continue reading Do CRTs and CLTs Need To Be Registered With the CA Attorney General?

Is this the Golden Age of CLATs?

Written by David Wheeler Newman and  Daniel Cousineau

The charitable lead trust has always been a powerful vehicle to balance philanthropic and estate planning objectives.  The recent convergence of two factors that are critically important in the planning dynamic for charitable lead annuity trusts (CLATs) create a planning environment that is so favorable for CLATs, it is no exaggeration to suggest that the current period may be the golden age of CLATs, presenting a very interesting planning opportunity for wealthy families.  But that opportunity is temporary, since the convergence of these factors is unlikely to continue for very long. Continue reading “Is this the Golden Age of CLATs?”

Year-End Tax Planning for College Football Fans

By David Wheeler Newman

Photo credit: iStock.com/Masisyan

Fans of college athletics may have heard something about tax legislation barreling through Congress this month, and didn’t pay much attention since it sounded like boring stuff that only meant something to big tech companies stashing their billions overseas.  But buried in the 500 pages of the legislation that has now passed both chambers is a year-end tax planning opportunity for sports fans.  Or, more precisely, a tax break that has been available to sports fans for over thirty years will be eliminated starting in 2018. Continue reading “Year-End Tax Planning for College Football Fans”

Understanding UPMIFA: Delegation of Management and Investment of Endowment Funds

By David Wheeler Newman

The Uniform Prudent Management of Institutional Funds Act (UPMIFA or the Act) was adopted in 2006 by the National Conference of Commissioners on Uniform State Laws, as the successor to the Uniform Management of Institutional Funds Act (UMIFA), and has (on 1/1/2017) been enacted in every state except Pennsylvania. UPMIFA provides guidance and authority to charitable organizations concerning the management and investment of charitable funds and for endowment spending.

prior post focused on UPMIFA rules for endowments held by charitable organizations, including standards for determining the annual spending from those funds, while this post will address UPMIFA rules for the delegation of management and investment functions.

Continue reading “Understanding UPMIFA: Delegation of Management and Investment of Endowment Funds”

Understanding UPMIFA: Important Endowment Concepts

By David Wheeler Newman

The Uniform Prudent Management of Institutional Funds Act (“UPMIFA” or “the Act”) was adopted in 2006 by the National Conference of Commissioners on Uniform State Laws, as the successor to the Uniform Management of Institutional Funds Act (UMIFA), and has (at 1/1/2017) been enacted in every state except Pennsylvania. UPMIFA provides guidance and authority to charitable organizations concerning the management and investment of charitable funds and for endowment spending.

UPMIFA contains rules and standards for their application across three broad areas of importance to charitable organizations, members of their fiduciary boards, and their advisers, if those organizations hold restricted funds including endowment. This post focuses on endowment, and future posts will address UPMIFA rules for the delegation of management and investment functions, and for the release or modification of restrictions contained in gift instruments. Continue reading “Understanding UPMIFA: Important Endowment Concepts”

Valuation Rule for Early Termination of Net-Income Charitable Remainder Unitrusts

By David Wheeler Newman

Under Internal Revenue Code § 664, a qualified charitable remainder unitrust each year during its term distributes to a non-charitable beneficiary a fixed percentage (5% or greater) of the value of trust assets, determined annually (the unitrust amount).  Assets remaining in the CRUT at the end of its term are distributed to charity.  Section 664(d) provides that a qualified CRUT may limit distributions to the non-charitable beneficiary to the lesser of the unitrust amount or trust income under fiduciary accounting principles (a net-income CRUT, or NICRUT), and may pay the non-charitable beneficiary any trust income in excess of the unitrust amount to the extent that aggregate distributions in prior years were less than the aggregate unitrust amounts as a result of the net-income limitation (a net-income with make-up CRUT, or NIMCRUT). Continue reading “Valuation Rule for Early Termination of Net-Income Charitable Remainder Unitrusts”