1. the beneficiary defective inheritor’s trust (“bdit”) “a powerful new wealth planning...
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THE BENEFICIARY DEFECTIVE THE BENEFICIARY DEFECTIVE INHERITOR’S TRUST INHERITOR’S TRUST
(“BDIT”)(“BDIT”)
“A Powerful New Wealth Planning Strategy”“A Powerful New Wealth Planning Strategy”
Michael W. Halloran, AEPMichael W. Halloran, AEP®®, CLU, CLU®®, CFP, CFP®®, ChFC, ChFC®®
22©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
A Special AcknowledgementA Special Acknowledgement
The Beneficiary Defective Trust, the original version of The Beneficiary Defective Trust, the original version of the BDIT, was created by attorney Richard A. Oshins in the BDIT, was created by attorney Richard A. Oshins in the 1970’s. In the ensuring years, under his tutelage, the 1970’s. In the ensuring years, under his tutelage, the concept has gained prominence in estate and asset the concept has gained prominence in estate and asset protection planning among top attorneys around the protection planning among top attorneys around the nation dealing with high-net-worth individuals and nation dealing with high-net-worth individuals and families. Grateful acknowledgement is given to his families. Grateful acknowledgement is given to his origination and further development of the BDIT and origination and further development of the BDIT and related strategies. related strategies.
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 33
TopicsTopics
Primary high-end wealth shifting strategiesPrimary high-end wealth shifting strategies
The BDIT ConceptThe BDIT Concept– BenefitsBenefits
TaxTax
Creditor protectionCreditor protection
Client does not give up controlClient does not give up control
Modern wealth designModern wealth design– Enhancing the value of gifts and bequestsEnhancing the value of gifts and bequests
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 44
Topics – cont.Topics – cont.
The squeeze, freeze and burnThe squeeze, freeze and burn
Enhanced IDITs for estate tax depletion planningEnhanced IDITs for estate tax depletion planning
Funded ILIT – the BDIT can buy life insurance onFunded ILIT – the BDIT can buy life insurance on– The client/beneficiaryThe client/beneficiary– Others with an insurable interestOthers with an insurable interest
Life insurance correlation with the BDITLife insurance correlation with the BDIT
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 55
Topics – cont.Topics – cont.
Providing funds for retirementProviding funds for retirement– QRPsQRPs– NIMCRUTsNIMCRUTs– BDIT with CVLIBDIT with CVLI
Life insurance as an asset classLife insurance as an asset class
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 66
Topics – cont.Topics – cont.
Clients with business or investment opportunitiesClients with business or investment opportunities
Planning with pass-through entitiesPlanning with pass-through entities
Doctors and business owners with equipment leasingDoctors and business owners with equipment leasing
Buy-sell strategiesBuy-sell strategies
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 77
Topics – cont.Topics – cont.
Advanced asset protection strategiesAdvanced asset protection strategies– Self-settled trustsSelf-settled trusts
Income tax strategiesIncome tax strategies
Estate planning for professional athletes and Estate planning for professional athletes and entertainersentertainers
Other planning opportunitiesOther planning opportunities
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 88
Primary Planning Choices forPrimary Planning Choices for High-End Wealth Shifting High-End Wealth Shifting
GRAT – IRC §2702GRAT – IRC §2702– Gift to trust in exchange for an annuity substantially Gift to trust in exchange for an annuity substantially
equal in value to the transferred propertyequal in value to the transferred property
IDIT – Note SaleIDIT – Note Sale– Non-controlling interest sold to an income tax Non-controlling interest sold to an income tax
defective trust in exchange for an installment notedefective trust in exchange for an installment note– Generally interest only with a balloon paymentGenerally interest only with a balloon payment
ILITILIT
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 99
Primary Planning Choices for Primary Planning Choices for High-End Wealth ShiftingHigh-End Wealth Shifting
These techniques involve moving wealth to trusts These techniques involve moving wealth to trusts created for created for someone else:someone else:– Wealth depletion concerns – no direct accessWealth depletion concerns – no direct access– Control concernsControl concerns
Loss of controlLoss of control
IRS exposure with too much retained controlIRS exposure with too much retained control
A better alternative – the BDITA better alternative – the BDIT– ““The Beneficiary Defective Inheritor’s Trust”The Beneficiary Defective Inheritor’s Trust”
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 1010
Major Causes of Wealth ErosionMajor Causes of Wealth Erosion in the U.S. in the U.S.
Bad Investments/managementBad Investments/management TaxesTaxes DivorcesDivorces LawsuitsLawsuits Beneficiary/family problemsBeneficiary/family problems Bad economyBad economy Changes in the lawChanges in the law
1111©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
The Client’s “Wish” ListThe Client’s “Wish” List
Save taxesSave taxes
Creditor and divorce protectionCreditor and divorce protection
Control over the plan - assets and incomeControl over the plan - assets and income
Full use and enjoyment of the plan assetsFull use and enjoyment of the plan assets
The right to decide who else uses or gets the propertyThe right to decide who else uses or gets the property– And when and how they get the propertyAnd when and how they get the property
Multi-generation/perpetuityMulti-generation/perpetuity
The ability to re-write the plan as neededThe ability to re-write the plan as needed
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 1212
Fundamental Facts of Wealth PlanningFundamental Facts of Wealth Planning
Trusts enhance gifts and bequestsTrusts enhance gifts and bequests
Inheriting in trust is better than inheriting outrightInheriting in trust is better than inheriting outright– Trusts offer many significant advantages that cannot Trusts offer many significant advantages that cannot
exists for assets owned outrightexists for assets owned outright– Assets received and retained in trust are more Assets received and retained in trust are more
valuable to the inheritor than assets received outrightvaluable to the inheritor than assets received outright
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 1313
Fundamental Facts of Wealth PlanningFundamental Facts of Wealth Planning- cont. -- cont. -
A trust shelters inherited assets from the beneficiary’sA trust shelters inherited assets from the beneficiary’s– TaxesTaxes
Transfer taxesTransfer taxes
Income taxesIncome taxes– Would be claimants Would be claimants
CreditorsCreditors
Divorcing spousesDivorcing spouses
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 1414
The Ultimate Creditor and CreditorThe Ultimate Creditor and Creditor Protection Vehicle Protection Vehicle
A A discretionarydiscretionary trust with “. . . the distribution trust with “. . . the distribution discretion held by an discretion held by an independent trusteeindependent trustee . . . is the . . . is the ultimate in ultimate in creditorcreditor and and divorce claims protectiondivorce claims protection – – even in a state that restricts so called ‘spendthrift’ even in a state that restricts so called ‘spendthrift’ trusts – since the beneficiary himself has no trusts – since the beneficiary himself has no enforceable rights against the trust.” enforceable rights against the trust.” (Emphasis (Emphasis supplied)supplied)
Frederick R. KeydelFrederick R. Keydel““Trustee Selection, Succession, and Removal: Ways to Trustee Selection, Succession, and Removal: Ways to
Blend Expertise with Family Control,” 23 U.Miami Inst. Blend Expertise with Family Control,” 23 U.Miami Inst. On Est. Plan., Ch 4 (1989) at On Est. Plan., Ch 4 (1989) at §409.1§409.1
1515©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Overlooked Benefit – Particularly in Overlooked Benefit – Particularly in Today’s Volatile Economic WorldToday’s Volatile Economic World
Trusts enable the beneficiary to borrow for business or Trusts enable the beneficiary to borrow for business or investment purposes without exposing trust-owned investment purposes without exposing trust-owned assets to riskassets to risk
Lending institutions typically require personal guarantees Lending institutions typically require personal guarantees of business owners and their spousesof business owners and their spouses
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 1616
Critical QuestionCritical Question
Can a wealthy client set up and fund a trust for Can a wealthy client set up and fund a trust for him/herself and protect his/her assets from his/her taxes him/herself and protect his/her assets from his/her taxes and creditors?and creditors?
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 1717
The Tax and Creditor RightsThe Tax and Creditor Rights Impediments Impediments
Income Tax – grantor trustIncome Tax – grantor trust
Estate Tax – grantor trustEstate Tax – grantor trust
Creditor rights – self-settled trustCreditor rights – self-settled trust– Estate tax inclusionEstate tax inclusion
Creditor rights can create serious income and wealth Creditor rights can create serious income and wealth transfer tax issues!transfer tax issues!– Also, watch distribution standards and who is (are) Also, watch distribution standards and who is (are)
the trusteesthe trustees
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 1818
The BDIT SolutionThe BDIT Solution
Anyone other than the client him/herself can set up and Anyone other than the client him/herself can set up and fund the trustfund the trust
Key Concept:Key Concept:– The trust must be set up and funded by someone elseThe trust must be set up and funded by someone else– The beneficiary cannot make “gifts” to the trustThe beneficiary cannot make “gifts” to the trust
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 1919
Test Your KnowledgeTest Your Knowledge
Combining the planning opportunities of:Combining the planning opportunities of:– Chapter 13Chapter 13– IRC §678IRC §678– Rev. Rul. 2004-64Rev. Rul. 2004-64– Rev. Rul. 85-13Rev. Rul. 85-13– Rev. Rul. 93-12Rev. Rul. 93-12
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2020
Question #1Question #1
Can I set up a trust for my descendants which will avoid Can I set up a trust for my descendants which will avoid their:their:– Transfer taxes, andTransfer taxes, and– Creditors, including divorcing spousesCreditors, including divorcing spouses– In perpetuityIn perpetuity
Chapter 13 GSTT rulesChapter 13 GSTT rules
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2121
The Typical Inheritor’s TrustThe Typical Inheritor’s Trust
A trust set up and funded by someone elseA trust set up and funded by someone else– Generally as an accommodationGenerally as an accommodation
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2222
Transfer Tax ConsequencesTransfer Tax Consequences
Measured by the amount of the contributionMeasured by the amount of the contribution
Subsequent growth of the assets is irrelevantSubsequent growth of the assets is irrelevant
GSTT exempt foreverGSTT exempt forever
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2323
Key ConceptsKey Concepts
A trust created by someone elseA trust created by someone else
No No gratuitousgratuitous transfers by the transfers by the beneficiariesbeneficiaries– Sales for FMV are OKSales for FMV are OK
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2424
Question #2Question #2
What are the income tax consequences of a gift subject What are the income tax consequences of a gift subject to a Crummey power of withdrawal?to a Crummey power of withdrawal?
IRC §§ 678 and 671IRC §§ 678 and 671– Beneficiary income tax statusBeneficiary income tax status– Trust income is taxes to the beneficiaryTrust income is taxes to the beneficiary
Remember – the income tax provisions and the Remember – the income tax provisions and the estate/gift tax provisions of the IRC are estate/gift tax provisions of the IRC are notnot interpreted interpreted
in paria materiain paria materia!!
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2525
Tax Consequences of an Income taxTax Consequences of an Income tax Defective Trust Including a BDIT Defective Trust Including a BDIT
Rev. Rul. 85-13Rev. Rul. 85-13– Non-recognition of gain of salesNon-recognition of gain of sales
The “tax burn”The “tax burn”
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2626
The “Tax Burn” ConceptThe “Tax Burn” Concept
Estate depletion as a result of paying income tax on trust Estate depletion as a result of paying income tax on trust assetsassets– Less assets exposed to estate taxesLess assets exposed to estate taxes– Less assets exposed to creditorsLess assets exposed to creditors
Trust assets grow income tax-free during the “Grantor” Trust assets grow income tax-free during the “Grantor” trust statustrust status
Over time the wealth compounding is more powerful Over time the wealth compounding is more powerful than discountingthan discounting
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2727
The Tax Burn - IllustrationThe Tax Burn - Illustration
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2828
The Tax Burn - IllustrationThe Tax Burn - Illustration
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 2929
Question #3Question #3
What are the gift tax implications if I pay income tax as a What are the gift tax implications if I pay income tax as a result of the grantor trust rules?result of the grantor trust rules?
Rev. Rule. 2004-64Rev. Rule. 2004-64– No additional gift on payment of income taxNo additional gift on payment of income tax
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 3030
Question #4Question #4
If I make a sale to a trust that is income tax defective to If I make a sale to a trust that is income tax defective to me, do I recognize taxable gain or loss?me, do I recognize taxable gain or loss?
Rev. Rul. 85-13Rev. Rul. 85-13– Non-recognition of gain/loss on sales/exchanges with Non-recognition of gain/loss on sales/exchanges with
an IDITan IDIT
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 3131
Question #5Question #5
If I own 100% of an entity and I make a gift of a 20% If I own 100% of an entity and I make a gift of a 20% interest to each of my five (5) children, are the gifts of interest to each of my five (5) children, are the gifts of each 20% interest valued as a non-controlling interest?each 20% interest valued as a non-controlling interest?
Rev. Rul. 93-12Rev. Rul. 93-12– No family attribution rules for purposes of discountingNo family attribution rules for purposes of discounting
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 3232
So What Makes A BDIT Work? So What Makes A BDIT Work?
Combines the planning opportunities of:Combines the planning opportunities of:
#1 - Chapter 13 – GSTT rules#1 - Chapter 13 – GSTT rules
#2 - IRC § 678– beneficiary income tax status#2 - IRC § 678– beneficiary income tax status
#3 - Rev. Rul. 2004-64 – no additional gift on #3 - Rev. Rul. 2004-64 – no additional gift on payment of income tax payment of income tax
#4 - Rev. Rul. 85-13 – non-recognition of sales to #4 - Rev. Rul. 85-13 – non-recognition of sales to IDITs IDITs
#5 - Rev. Rul. 93-12 – no family attribution rules for #5 - Rev. Rul. 93-12 – no family attribution rules for
purposes of discountingpurposes of discounting
3333©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
The Ultimate TrustThe Ultimate Trust A Beneficiary Defective Inheritor’s A Beneficiary Defective Inheritor’s
TrustTrust
Combining:Combining:
– A third-party settled trust withA third-party settled trust with
– Grantor trust income tax status for the beneficiaryGrantor trust income tax status for the beneficiary
Finessing the “pipe dream”Finessing the “pipe dream”
3434©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
BDIT Fact PatternBDIT Fact Pattern
Mom sets up the trust for the benefit of her son and his Mom sets up the trust for the benefit of her son and his childrenchildren– Transfer tax protection for the beneficiariesTransfer tax protection for the beneficiaries– Creditor protection for the beneficiariesCreditor protection for the beneficiaries– In perpetuityIn perpetuity
Wealthy client (the son) is the grantor for income tax Wealthy client (the son) is the grantor for income tax purposespurposes– Income tax planning for the sonIncome tax planning for the son
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 3535
BDIT Fact Pattern – cont.BDIT Fact Pattern – cont.
Client’s parent sets up the BDIT funding it with a gift of Client’s parent sets up the BDIT funding it with a gift of $5,000$5,000– Parent uses independent fundsParent uses independent funds– Parent is the settlor of the trust for transfer tax Parent is the settlor of the trust for transfer tax
purposes and for creditor rights purposespurposes and for creditor rights purposes
Client (and only the client) is given a Crummey Client (and only the client) is given a Crummey withdrawal power over the entire giftwithdrawal power over the entire gift– The withdrawal right is allowed to lapseThe withdrawal right is allowed to lapse
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 3636
BDIT Fact Pattern – cont.BDIT Fact Pattern – cont.
Son owns one-third (1/3) of a pass-through entitySon owns one-third (1/3) of a pass-through entity
Value of 100% of the entity - $50 millionValue of 100% of the entity - $50 million
Value of son’s one-third (1/3) interest after discountingValue of son’s one-third (1/3) interest after discounting– $10 million$10 million
Son sells discountable interests in the entity to the trusts Son sells discountable interests in the entity to the trusts for installment notesfor installment notes
Son’s sale to the trust is for “full and adequate Son’s sale to the trust is for “full and adequate consideration”consideration”
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 3737
A Beneficiary DefectiveA Beneficiary Defective Inheritor’s Trust Inheritor’s Trust
The trust is defective to the client for income tax The trust is defective to the client for income tax purposespurposes– Power of withdrawal – IRC §678(a)Power of withdrawal – IRC §678(a)– Transactions between the client and the trust are Transactions between the client and the trust are
ignored for income tax purposesignored for income tax purposes
Rev. Rul. 85-13Rev. Rul. 85-13
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 3838
VariationVariation Spousal Irrevocable Trust (“SIT”) Spousal Irrevocable Trust (“SIT”)
Set up and seeded by the client’s spouseSet up and seeded by the client’s spouse
Combines Combines – IRC §677(a) – income tax grantor trust rulesIRC §677(a) – income tax grantor trust rules– IRC §1041(a) – no tax on transfers between spousesIRC §1041(a) – no tax on transfers between spouses– Rev. Rul. 85-13 Rev. Rul. 85-13
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 3939
Spousal Inheritor’s Trust – Cont.Spousal Inheritor’s Trust – Cont.
Caveats Caveats – Settler spouse is the “owner” of the trust incomeSettler spouse is the “owner” of the trust income– Subsequent divorce will not terminate grantor trust Subsequent divorce will not terminate grantor trust
statusstatus
IRC §672(e)(2)IRC §672(e)(2)
The settler spouse cannot be a beneficiaryThe settler spouse cannot be a beneficiary– Solution – give the beneficiary spouse a SPASolution – give the beneficiary spouse a SPA– Support trust riskSupport trust risk
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 4040
Funded ILITFunded ILIT
BDITBDIT
Spousal Irrevocable Trust variationSpousal Irrevocable Trust variation
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 4141
So What Is A BDIT?So What Is A BDIT?
A dynasty trust set up for A dynasty trust set up for mymy descendants which avoids descendants which avoids theirtheir– Transfer taxes Transfer taxes – Creditors, including divorcing spousesCreditors, including divorcing spouses
A beneficiary “controlled” trustA beneficiary “controlled” trust
Allows gifts and sales to a trust that is income tax Allows gifts and sales to a trust that is income tax defective as to the beneficiarydefective as to the beneficiary– Crummey power of withdrawal – § 678Crummey power of withdrawal – § 678
Wealth transfer leveraging with discounted entitiesWealth transfer leveraging with discounted entities
4242©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
BDIT DesignBDIT Design
Established and initially funded by a third partyEstablished and initially funded by a third partyFully discretionary distribution standardsFully discretionary distribution standardsControlled trusteeshipControlled trusteeship– Family trusteeFamily trustee– Independent trusteeIndependent trustee
The “use” conceptThe “use” conceptBroad SPA – a “re-write” powerBroad SPA – a “re-write” powerPerpetualPerpetualBeneficiary has the functional equivalence of outright Beneficiary has the functional equivalence of outright ownership of the trust assetsownership of the trust assets
4343
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
““Seeding” the TrustSeeding” the Trust
Must come from the donor’s fundsMust come from the donor’s funds
Economic validityEconomic validity– Debt-equity ratioDebt-equity ratio– Rule of thumb – 10% or 9:1Rule of thumb – 10% or 9:1
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 4444
GuaranteesGuarantees
Guarantees as “seed” moneyGuarantees as “seed” money– Must be legitimateMust be legitimate– Better than trust assetsBetter than trust assets– Often made by beneficiariesOften made by beneficiaries– Need not be for the full amount of the noteNeed not be for the full amount of the note
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 4545
Is a Gratuitous Guarantee a Gift?Is a Gratuitous Guarantee a Gift?
Unsettled Unsettled – Cases seem to say noCases seem to say no
We pay for the guaranteeWe pay for the guarantee– Get an appraisalGet an appraisal– Avoids risk of gift to the trust by the guarantorAvoids risk of gift to the trust by the guarantor– Income tax-free if the guarantor is the spouse or an Income tax-free if the guarantor is the spouse or an
income tax defective trustincome tax defective trust
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 4646
Seeding the TrustsSeeding the Trusts
Gifts to Trust Gifts to Trust
4747
$1,666
FBOClient
and Katie
FBOClient
and Bob
FBO Client
and Sue
Trust A Trust B Trust C
$1,667 $1,667
Client – Power of Withdrawal $5,000
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
Transfer TaxTransfer Tax Creditor rights Creditor rights
Owner for Income Tax Owner for Income Tax Purposes - IRC § 678(a)Purposes - IRC § 678(a)
4848
Caveat: Client has a Power of Withdrawal over all gifts to BDITCaveat: Client never makes a gratuitous transfer to BDIT
Who is the Grantor?
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
Tax-Free Sale to BDITTax-Free Sale to BDIT
AssetsAssets
Installment NotesInstallment Notes
WealthyWealthy client sells discountable income client sells discountable income producing assets for an Installment Note producing assets for an Installment Note
4949
Trust A Trust B Trust C
BDITsBDITs
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
Note Sale to a BDIT with a Note Sale to a BDIT with a GuaranteeGuarantee
5050
Parent“mom”
BDIT WHFee
1. Family Trustee2. Beneficiary3. I/T Grantor4. Seller
Gift Subject to Power of Withdrawal
GuaranteeNote Sale
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
BDIT Tax ResultsBDIT Tax Results
Estate freezeEstate freeze– Installment notes in the estateInstallment notes in the estate– Post-transfer appreciation shiftedPost-transfer appreciation shifted
Estate squeezeEstate squeeze– Discounted assets removed from the transfer tax Discounted assets removed from the transfer tax
systemsystem
Income “tax burn” Income “tax burn” – the beneficiary pays the tax on the – the beneficiary pays the tax on the income generate by the trustincome generate by the trust
IRC §678IRC §678
Crummey power of withdrawalCrummey power of withdrawal
5151©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
BDIT Non-tax ResultsBDIT Non-tax Results
The client/beneficiary is in control of the BDITThe client/beneficiary is in control of the BDIT
Assets are creditor protected for the client/beneficiary Assets are creditor protected for the client/beneficiary
and his/her familyand his/her family
Assets are available after the “tax burn”Assets are available after the “tax burn”
Client/beneficiary has a “re-write” power with a SPAClient/beneficiary has a “re-write” power with a SPA
– Protects against potential family conflictsProtects against potential family conflicts
– Protects against inadvertent gifts to the trustProtects against inadvertent gifts to the trust
5252©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Safe Transaction – Valuation DisparitySafe Transaction – Valuation Disparity
Gift Tax/Chapter 14Gift Tax/Chapter 14– SPA protects against an inadvertent giftSPA protects against an inadvertent gift– The gift is incompleteThe gift is incomplete
Reg. §25.2511-2(b)Reg. §25.2511-2(b)
EstateTax/GSTTEstateTax/GSTT– Report the saleReport the sale
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 5353
IRS Reporting of Sale to TrustIRS Reporting of Sale to Trust
Timely file from 709 gift tax returnTimely file from 709 gift tax return– Non-completed giftNon-completed gift– Treas. Reg. §301-6501(c) - 1(f)(4)Treas. Reg. §301-6501(c) - 1(f)(4)
If IRS does not challenge the valuationIf IRS does not challenge the valuation
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 5454
IRS Reporting of Sale to TrustIRS Reporting of Sale to Trust- cont. -- cont. -
If the IRS successfully challenges the valuationIf the IRS successfully challenges the valuation– It is an incomplete giftIt is an incomplete gift
Treas. Reg. §25-2511-2(b)Treas. Reg. §25-2511-2(b)– Allocation pro-rata between exempt and non-exempt Allocation pro-rata between exempt and non-exempt
trusts for GSTT purposestrusts for GSTT purposes
The BDIT is safer than alternative strategies The BDIT is safer than alternative strategies
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 5555
BDIT Non-tax Results -Cont.BDIT Non-tax Results -Cont.
Opportunity shiftingOpportunity shifting
– Business and investment opportunitiesBusiness and investment opportunities
– Giving free advice or managing trust assetsGiving free advice or managing trust assets
Quintessential Quintessential life insurance trustlife insurance trust
– Life insurance on a beneficiary who is also a trusteeLife insurance on a beneficiary who is also a trustee
– Decision must be made by an independent trusteeDecision must be made by an independent trustee
– Beneficiary cannot have a SPA over life insuranceBeneficiary cannot have a SPA over life insurance
5656©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Benefits of This StrategyBenefits of This Strategy
The entity/assets are moved out of the client’s estate on The entity/assets are moved out of the client’s estate on a discounted basisa discounted basis
The transaction results in a leveraged estate freezeThe transaction results in a leveraged estate freeze
There is no income tax on the sales or the guaranteeThere is no income tax on the sales or the guarantee
All of the assets in the BDIT are still available to and All of the assets in the BDIT are still available to and controlled by the Inheritor/beneficiary controlled by the Inheritor/beneficiary
5757©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Benefits - ContinuedBenefits - Continued
The Inheritor/beneficiary has a SPOA – a rewrite powerThe Inheritor/beneficiary has a SPOA – a rewrite power
The taxable estate of the inheritor is depleted by The taxable estate of the inheritor is depleted by valuation discounts as well as payment of incomes taxes valuation discounts as well as payment of incomes taxes on the trust income – the “tax burn”on the trust income – the “tax burn”
The Inheritor and his/her family have creditor and The Inheritor and his/her family have creditor and divorce protection in perpetuitydivorce protection in perpetuity
5858©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Benefits - ContinuedBenefits - Continued
The Inheritor and his/her family have GSTT and estate The Inheritor and his/her family have GSTT and estate exemption in perpetuityexemption in perpetuity
The SPOA prevents a gift tax on transactions with the The SPOA prevents a gift tax on transactions with the trusttrust
Otherwise resistant clients will move forward with Otherwise resistant clients will move forward with planningplanning
5959©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Why Wouldn’t Everyone Do A BDIT?Why Wouldn’t Everyone Do A BDIT?
Misconception – The BDIT is only for the ultra wealthyMisconception – The BDIT is only for the ultra wealthy– Planning alternatives involve giving to someone elsePlanning alternatives involve giving to someone else– BDIT includes the virtues of alternative estate BDIT includes the virtues of alternative estate
planning techniquesplanning techniques– BDIT benefits – substantial and foreverBDIT benefits – substantial and forever
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6060
Planning For The Mid-range ClientPlanning For The Mid-range Client
The client with a:The client with a:– $5 million business$5 million business– $1 million home$1 million home– $2 million other assets$2 million other assets
The dilemma:The dilemma:– Tax and creditor exposureTax and creditor exposure– Cannot afford to give the wealth away!Cannot afford to give the wealth away!
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6161
Planning For The Mid-range ClientPlanning For The Mid-range Client
GRAT and IDITGRAT and IDIT– Prohibition against transfers with retained rightsProhibition against transfers with retained rights
BDITBDIT– ““Fair and adequate consideration” exceptionFair and adequate consideration” exception
Really the “only option”Really the “only option”
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6262
THE BDIT vs. OTHER THE BDIT vs. OTHER STRATEGIESSTRATEGIES
The BDIT vs. Note Sales to IDITsThe BDIT vs. Note Sales to IDITs
Wealth shifting benefitsWealth shifting benefits– Retained interest often creates continued Sec. 2036 Retained interest often creates continued Sec. 2036
exposureexposure– No need to retain anythingNo need to retain anything
ControlControl
No economic riskNo economic risk– ManagementManagement– Use and enjoymentUse and enjoyment– Rewrite powerRewrite power– Tax burnTax burn
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6464
The BDIT vs. Note Sales to IDITSThe BDIT vs. Note Sales to IDITS
SafetySafety– Gift taxGift tax– Step transactionStep transaction– Pierre vs. Comm’rPierre vs. Comm’r
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6565
The BDIT vs. APTsThe BDIT vs. APTs
Greater creditor protectionGreater creditor protection– Not a self-settled trustNot a self-settled trust– Transfer tax savingsTransfer tax savings– ControlControl– Use and enjoyment determined by the clientUse and enjoyment determined by the client– APTs continuing costsAPTs continuing costs
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6666
BDIT vs. FLPsBDIT vs. FLPs
Historical purpose of FLPsHistorical purpose of FLPs– ControlControl– Valuation discountsValuation discounts
IRS Sec. 2036 exposureIRS Sec. 2036 exposure– There is no IRS Sec. 2536There is no IRS Sec. 2536
Substantial non-tax purposeSubstantial non-tax purpose
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6767
BDIT vs. ILITsBDIT vs. ILITs
Built-in funded ILITBuilt-in funded ILIT
No Crummey complexities and limitationsNo Crummey complexities and limitations
Living benefits of life insuranceLiving benefits of life insurance– Access to “inside build-up”Access to “inside build-up”
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6868
The BDIT and Other The BDIT and Other Estate Planning VehiclesEstate Planning Vehicles
Revocable trusts – avoid probateRevocable trusts – avoid probate
GiftingGifting
Charitable planningCharitable planning
Business succession planningBusiness succession planning
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 6969
The BDIT and Other Estate Planning The BDIT and Other Estate Planning VehiclesVehicles- Cont. -- Cont. -
Pre-marital agreementsPre-marital agreements
Unmarried, co-habiting partnersUnmarried, co-habiting partners– TraditionalTraditional– Non-traditionalNon-traditional
Planning for physiciansPlanning for physicians
Planning for athletes and entertainersPlanning for athletes and entertainers
Combined with charitable planningCombined with charitable planning
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7070
TOPICSTOPICS
Advantages of trustsAdvantages of trusts
Designing trusts from the viewpoint of the competent Designing trusts from the viewpoint of the competent inheritorinheritor
Opportunity shiftingOpportunity shifting
Hypothetical fact patternHypothetical fact pattern
The BDIT solution – freeze, squeeze, and burnThe BDIT solution – freeze, squeeze, and burn
BDIT/life insurance compatibilityBDIT/life insurance compatibility
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7171
ADVANTAGES OF TRUSTSADVANTAGES OF TRUSTS
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7272
Key ConceptKey ConceptTrusts Enhance Gifts and BequestsTrusts Enhance Gifts and Bequests
Assets received and retained in trust are much more Assets received and retained in trust are much more valuable to the inheritor/donee than assets received valuable to the inheritor/donee than assets received outrightoutright
The foundational concept of modern wealth planning:The foundational concept of modern wealth planning:
““Own everything in trust forever…”Own everything in trust forever…”
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7373
A Trust “Shelters” Inherited AssetsA Trust “Shelters” Inherited Assets From the Beneficiaries’… From the Beneficiaries’…
Taxes Taxes – Transfer taxesTransfer taxes– Income taxesIncome taxes
Potential claimantsPotential claimants– CreditorsCreditors– Divorcing spousesDivorcing spouses– Government/agenciesGovernment/agencies– OthersOthers
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7474
Transfer TaxesTransfer Taxes
““In fact, we haven’t got an estate tax, what we In fact, we haven’t got an estate tax, what we
have, you pay an estate tax if you want to; if you don’t have, you pay an estate tax if you want to; if you don’t want to, you don’t have to.”want to, you don’t have to.”
Statement of Prof. A. James CasnerStatement of Prof. A. James Casner““Estate and Gift Taxes: Hearings Before the Estate and Gift Taxes: Hearings Before the House Ways and Means Comm.,” 94House Ways and Means Comm.,” 94thth Cong., Cong.,
2d Sess., pt. 2, 1335 (March 15-23, 1976) 2d Sess., pt. 2, 1335 (March 15-23, 1976)
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7575
Transfer Taxes – Cont.Transfer Taxes – Cont.
““The perpetual generation-skipping trust may have The perpetual generation-skipping trust may have been the ultimate estate-planning scheme for those been the ultimate estate-planning scheme for those who had the foresight to establish one.”who had the foresight to establish one.”
“…“…it appears possible to create … a perpetual trust, it appears possible to create … a perpetual trust, permanently eliminating future transfer taxes.”permanently eliminating future transfer taxes.”
““For an intervening generation now the beneficiary For an intervening generation now the beneficiary of a generation-skipping trust, estate planning is no of a generation-skipping trust, estate planning is no problem, because the trust is already the best problem, because the trust is already the best possible built-in estate plan.”possible built-in estate plan.”
George CooperGeorge Cooper““A Voluntary Tax? New Perspectives on Sophisticated Estate Tax Avoidance,” A Voluntary Tax? New Perspectives on Sophisticated Estate Tax Avoidance,”
The Brookings Institution, Washington D.C. (1979), P 57,58The Brookings Institution, Washington D.C. (1979), P 57,58
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7676
Power of Compound Growth Power of Compound Growth
AssumptionsAssumptions
$1 million contributed to trust$1 million contributed to trust
Trust lasts 120 yearsTrust lasts 120 years
45% transfer tax imposed on non-dynastic trust 45% transfer tax imposed on non-dynastic trust
assets every 30 yearsassets every 30 years
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7777
Power of Compound Growth Power of Compound Growth ChartChart
________________________________________________________________________________________________________ ValueValue Value Value
of Trustof Trust of Property of Property Annual Annual After After if noif noGrowthGrowth 120 Years 120 Years Trust Trust
__________________________________________________________________________________________________________
4%4% $ 110,662,561$ 110,662,561 $ 10,126,316 $ 10,126,3165%5% 348,911,986 348,911,986 31,927,627 31,927,6276%6% 1,088,187,748 1,088,187,748 99,575,980 99,575,9807%7% 3,357,788,383 3,357,788,383 307,258,623 307,258,6238%8% 10,252,992,943 10,252,992,943 938,212,935 938,212,935
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7878
ObservationsObservations
Chart only illustrates estate tax depletionChart only illustrates estate tax depletion
Ignores impact ofIgnores impact of
DivorceDivorce
LawsuitsLawsuits
Reduced propensity to spend trust assetsReduced propensity to spend trust assets
State income tax savingsState income tax savings
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 7979
INCOME TAXESINCOME TAXES
Reduced planning importance due toReduced planning importance due toCompressed ratesCompressed ratesReduced exemption Reduced exemption Kiddie taxKiddie tax
Defective trust accelerates growth during “owners” Defective trust accelerates growth during “owners” lifetime lifetime
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 8080
The Ultimate Creditor and CreditorThe Ultimate Creditor and Creditor Protection Vehicle Protection Vehicle
A A discretionarydiscretionary trust with “. . . the distribution trust with “. . . the distribution discretion held by an discretion held by an independent trusteeindependent trustee . . . is the . . . is the ultimate in ultimate in creditorcreditor and and divorce claims protectiondivorce claims protection – – even in a state that restricts so called ‘spendthrift’ even in a state that restricts so called ‘spendthrift’ trusts – since the beneficiary himself has no trusts – since the beneficiary himself has no enforceable rights against the trust.” enforceable rights against the trust.” (Emphasis (Emphasis supplied)supplied)
Frederick R. KeydelFrederick R. Keydel““Trustee Selection, Succession, and Removal: Ways to Trustee Selection, Succession, and Removal: Ways to
Blend Expertise with Family Control,” 23 U.Miami Inst. Blend Expertise with Family Control,” 23 U.Miami Inst. On Est. Plan., Ch 4 (1989) at On Est. Plan., Ch 4 (1989) at §409.1§409.1
8181©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Creditor and Divorce ProtectionCreditor and Divorce Protection
Asset Protection MaximAsset Protection Maxim
Divorces – Trust better than pre-nuptial Divorces – Trust better than pre-nuptial agreementagreement
Use even if taxes were not a Use even if taxes were not a considerationconsideration
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 8282
Overlooked Benefit – Particularly Overlooked Benefit – Particularly In Today’s Volatile Economic WorldIn Today’s Volatile Economic World
Enables beneficiary to borrow for business or investment Enables beneficiary to borrow for business or investment purposes without exposing trust owned assets to riskpurposes without exposing trust owned assets to risk
Lending institution typically requires personal guarantees Lending institution typically requires personal guarantees of business owners and their spousesof business owners and their spouses
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 8383
Why We Use Dynastic Trusts Why We Use Dynastic Trusts Even If There Is No Estate Tax Even If There Is No Estate Tax
Predator protectionPredator protection
State Income TaxState Income Tax
Income shiftingIncome shifting
There will be a gift taxThere will be a gift tax
Enables younger beneficiaries to participate in Enables younger beneficiaries to participate in family wealth earlierfamily wealth earlier
Compare to a GRATCompare to a GRAT
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 8484
Receiving Assets in Trust Receiving Assets in Trust Enhances the Gift or InheritanceEnhances the Gift or Inheritance
Transfers from someone other than Transfers from someone other than beneficiarybeneficiary
If beneficiary makes the transfer it is a If beneficiary makes the transfer it is a self-settled trustself-settled trust
– TaxesTaxes– CreditorsCreditors
Conclusion - Transfers in trust are more Conclusion - Transfers in trust are more valuable to recipientsvaluable to recipients
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 8585
Beneficiary Controlled TrustsBeneficiary Controlled Trusts
Beneficiaries will like “in trust” inheritances Beneficiaries will like “in trust” inheritances only if:only if:
They are placed in control of the trustThey are placed in control of the trust
They understand benefits of receiving They understand benefits of receiving property in trustproperty in trust
They understand the BCT conceptThey understand the BCT concept
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 8686
Our GoalsOur Goals
Maximizing “in trust” benefitsMaximizing “in trust” benefits
Maximize control and rights similar to outright ownership Maximize control and rights similar to outright ownership while preserving “in trust” benefitswhile preserving “in trust” benefits
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 8787
Client’s GoalsClient’s Goals
Transfer tax avoidance Transfer tax avoidance
Creditor ProtectionCreditor Protection
ControlControl
Use and enjoyment of the propertyUse and enjoyment of the property
Determine who inheritsDetermine who inherits
Safe transactionSafe transaction©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander 8888
Design of TrustsDesign of Trusts
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 8989
Traditional TrustsTraditional TrustsTypical CharacteristicsTypical Characteristics
Pays out incomePays out income
Principal may be invaded for Principal may be invaded for “HEMS” – “support trust”“HEMS” – “support trust”
Distributes assets at Distributes assets at specified agesspecified ages
Beneficiary not in controlBeneficiary not in control
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9090
Modern Trust DesignModern Trust Design
Fully DiscretionaryFully Discretionary
PerpetualPerpetual
““Use” ConceptUse” Concept
Broad SPA’s – “Re-write power”Broad SPA’s – “Re-write power”
Controlled Trusteeship at Proper TimeControlled Trusteeship at Proper TimeFamily TrusteeFamily TrusteeIndependent TrusteeIndependent Trustee
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9191
Trusts Protect Assets Trusts Protect Assets From Creditors and Predators From Creditors and Predators
Trust must be set up by someone other than the Trust must be set up by someone other than the beneficiary him/herselfbeneficiary him/herself
Third party settled trustThird party settled trust
Makes sense even if there was no transfer taxMakes sense even if there was no transfer tax
Modern theory of comprehensive wealth Modern theory of comprehensive wealth planning:planning:
““Own everything in trust forever…”Own everything in trust forever…”
9292©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Beneficiary Controlled Trust “BCT”Beneficiary Controlled Trust “BCT”
Goal – To maximize the benefits that an “in trust” Goal – To maximize the benefits that an “in trust” inheritance can provideinheritance can provide
Family Trustee Family Trustee Controls InvestmentsControls InvestmentsControls Identity of the Independent TrusteeControls Identity of the Independent Trustee
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9393
Beneficiary Controlled Trust “BCT”Beneficiary Controlled Trust “BCT”
Independent TrusteeIndependent TrusteeControls all non-tax sensitive decisionsControls all non-tax sensitive decisionsIndividual or institution who meets the criteria of Individual or institution who meets the criteria of IRC § 672(c)IRC § 672(c)
““Independence” does not require a confrontational Independence” does not require a confrontational relationshiprelationship
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9494
OpportunityOpportunity
ShiftingShifting
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9595
Opportunity ShiftingOpportunity Shifting
Referrals of favorable business or Referrals of favorable business or investment opportunitiesinvestment opportunities
Giving free advice or managing assetsGiving free advice or managing assets
Inheritor’s Trust as recipientInheritor’s Trust as recipient
BDIT often preferableBDIT often preferable
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9696
Basic Inheritor’s TrustBasic Inheritor’s TrustOpportunity ShiftingOpportunity Shifting
Income Tax OptionsIncome Tax OptionsTraditional TrustTraditional TrustIDGTIDGTBDITBDITSITSITCombinationCombination
Tax BurnTax BurnIDGTIDGTSITSITBDITBDIT
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9797
Putting the BDIT on SteroidsPutting the BDIT on SteroidsHypothetical Fact PatternHypothetical Fact Pattern
Client owns 1/3 of a pass-through entityClient owns 1/3 of a pass-through entity
Value of entity $50 millionValue of entity $50 million
Valuation discounts assume 40%Valuation discounts assume 40%
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9898
The BDIT StrategyThe BDIT Strategy
Client’s parent sets up BDIT funding it Client’s parent sets up BDIT funding it with $5,000 with $5,000
Client is given power of withdrawal Client is given power of withdrawal
Client sells his 1/3 interest in the Client sells his 1/3 interest in the entity to the trust for a $10 million entity to the trust for a $10 million note note
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 9999
Variation – Spousal Variation – Spousal Irrevocable TrustIrrevocable Trust
Client’s spouse is the SettlorClient’s spouse is the Settlor
IRC §677(a)IRC §677(a)
IRC §1041(a)IRC §1041(a)
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 100100
Parent is SettlorParent is Settlor
Client’s parent sets up BDIT funding it with Client’s parent sets up BDIT funding it with $5,000$5,000
Parent uses independent fundsParent uses independent funds
Parent is Settlor for transfer tax and Parent is Settlor for transfer tax and creditor right purposescreditor right purposes
Sale by the beneficiary is for “full and Sale by the beneficiary is for “full and adequate consideration”adequate consideration”
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 101101
Beneficiary Defective TrustBeneficiary Defective Trust
Trust is defective to the client/inheritor for Trust is defective to the client/inheritor for income tax purposesincome tax purposes
Power of withdrawal IRC § 678(a)Power of withdrawal IRC § 678(a)
Transactions between client and trust Transactions between client and trust ignored. Rev. Rul. 85-13ignored. Rev. Rul. 85-13
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 102102
Seeding the TrustsSeeding the Trusts
Gifts to Trust Gifts to Trust
103103
$1,666
FBOClient
and Katie
FBOClient
and Bob
FBO Client
and Sue
Trust A Trust B Trust C
$1,667 $1,667
Client – Power of Withdrawal $5,000
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
Transfer TaxTransfer Tax Creditor rights Creditor rights
Owner for Income Tax Owner for Income Tax Purposes - IRC § 678(a)Purposes - IRC § 678(a)
104104
Caveat: Client has a Power of Withdrawal over all gifts to BDITCaveat: Client never makes a gratuitous transfer to BDIT
Who is the Grantor?
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
Tax-Free Sale to BDITTax-Free Sale to BDIT
AssetsAssets
Installment NotesInstallment Notes
WealthyWealthy client sells discountable income client sells discountable income producing assets for an Installment Note producing assets for an Installment Note
105105
Trust A Trust B Trust C
BDITsBDITs
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
Note Sale to a BDIT with a Note Sale to a BDIT with a GuaranteeGuarantee
106106
Parent“mom”
BDIT WHFee
1. Family Trustee2. Beneficiary3. I/T Grantor4. Seller
Gift Subject to Power of Withdrawal
GuaranteeNote Sale
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander
Results - TaxResults - Tax
Freeze, Squeeze and BurnFreeze, Squeeze and Burn
Estate FreezeEstate FreezeInstallment Notes in the beneficiary’s Installment Notes in the beneficiary’s estateestatePost-transfer appreciated shiftedPost-transfer appreciated shifted
Estate ThawEstate ThawDiscounted assets are removed from Discounted assets are removed from the transfer tax system foreverthe transfer tax system foreverTax Burn – client beneficiary pays the Tax Burn – client beneficiary pays the income tax on trust incomeincome tax on trust income
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 107107
Results – Non-Tax
Client/inheritor is in control of the BCTHot assets are creditor protected for client and familyAssets available after “tax burn”Re-write power
Protects against potential family conflictsProtects against inadvertent gift tax
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 108108
“Seeding” the Trust
Must come from donor’s funds
Economic Validity
Debt-Equity Ratio
Rule of thumb 10% or 9:1
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 109109
Guarantees
Guarantees as “seed” money
Must be legitimate
Better than trust assets
Often made by beneficiaries
Need not be for full amount of the note
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 110110
Is a “Gratuitous” Guarantee a Gift?
Unsettled
Cases seem to say “no”
We pay for the guarantee
Get appraisal
Avoids risk of gift to trust by guarantor
Income tax-free - if spouse or defective trust
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 111111
Ancillary Considerations
Economic Risk – Estate DepletionExposure
TogglingReimbursement ClausesForum shopping to avoid self-settled trustBDIT resolves dilemmaSIT exposure
Basis Monitoring
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 112112
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 113113
ENHANCED PLANNING ENHANCED PLANNING OPPORTUNITIES OPPORTUNITIES
WITH BDITsWITH BDITs
Significant Life Insurance Sales PotentialSignificant Life Insurance Sales Potential
Life Insurance - ILIT
BDIT is also a funded ILIT
So is the SIT variation
Insurance on the life of a beneficiary who is also a trustee
Decisions made by independent trustee
No power of appointment
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 114114
Life Insurance Correlation with a BDIT
Life insurance has two component parts
Death benefit
Inside buildup
Asset class
QRP and NIMCRUT alternative
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 115115
Life Insurance Correlation with BDIT – Cont.
Early DeathNegligible Tax BurnWin on the Mortality Bet
Later DeathGreater estate tax depletionTax-free build-up more dramatic
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 116116
Increasing: income tax
deferred cash value –
available for use and
outside the estate
Decreasing: need for estate tax liquidity during “burn” (& net amount at risk outside estate)
Dec
reas
ing
Net
Am
ount
at
Ris
k
Increasing Cash V
alue
Now FutureEstate accessible
Estate tax free“Tax burn”Insurance
+A FIXED component
of an investmentportfolio outside the
estate
Derived from “Life Insurance as an Asset Class” by Richard M. Weber, MBA, CLU and Christopher Hause, FSA, MAAA © 2009 Ethical Edge Insurance Solutions, LLC. For further information contact [email protected]
EXHIBIT F
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 117117
Goal – tax exempt or tax deferred wealth accumulation
Vehicles
Qualified Retirement Plans (“QRPs”)
NIMCRUTs
Cash Value Life Insurance (“CVLI”)
Primary Retirement Planning Alternatives
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 118118
Tax deferral – not exemption
Tax at ordinary income rates
Often converts capital gain into ordinary income
IRD
Non-alienation prohibits transfers to escape the estate tax
QRP’s
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 119119
Too Soon-Too Late – Too Much-Too Little
Contributions
Distributions
Administrative and Legal Costs
Government Regulations
IRS
Department of Labor
Legislative Changes
Non-discriminatory
QRP’s - Cont.QRP’s - Cont.
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 120120
Tax-deferral-not exemption
Four-tier Rule – worst first
10% Rule
Eliminates younger clients
Reduces potential accumulation period
Goes to charity at death
Early death risk
Administrative and legal costs
Fully discriminatory
NIMCRUTs
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 121121
Tax exempt access to the investment fund
Can access fund on a temporary basis and pay back
E.g. - college
Survivorship feature
Early death – win on mortality bet
No administrative and legal costs
Fully discriminatory
Cash Value Life Insurance - CVLICash Value Life Insurance - CVLI
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 122122
Deferral v. Tax exempt access to income
Access to funds on a temporary basis
Survivorship Feature
Risk of early death for QRPs and NIMCRUTs
Decedent's Receipt
QRP-IRD
NIMCRUT – none
CVLI in trust – tax-free
Major Comparisons Comparisons
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 123123
Adjustments – beneficiary controlled
Special Trustee
Not subject to power of appointment
Accessing Inside Build-up
Two-step process
Wrap Trust™ - there may be serious tax problems
Life Insurance in a Life Insurance in a Beneficiary Defective Beneficiary Defective
Inheritor’s Trust Trust
124124©2010 Richard A. Oshins and Robert
G. Alexander
Accessing Policy Cash ValuesAccessing Policy Cash Values
Loan money to the beneficiaryLoan money to the beneficiary– No income tax consequence No income tax consequence
Purchase other assets from the beneficiaryPurchase other assets from the beneficiary– Non-recognition of gainNon-recognition of gain
Distributions to the beneficiaryDistributions to the beneficiary– Worst alternativeWorst alternative
Assets no longer protectedAssets no longer protected
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 125125
Accessing Policy Cash Values – Cont.Accessing Policy Cash Values – Cont.
MECMEC– Income tax issuesIncome tax issues– Estate tax inclusion issuesEstate tax inclusion issues
Back-end loaded policiesBack-end loaded policies
Other planning issuesOther planning issues
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 126126
Other Planning OpportunitiesOther Planning Opportunities With a BDIT With a BDIT
Tax and asset protected foreverTax and asset protected forever
Advanced “wealth shifting” opportunitiesAdvanced “wealth shifting” opportunities– Family income tax planningFamily income tax planning– Valuation/discount planningValuation/discount planning– Structured gifts and loansStructured gifts and loans– New businesses – seed moneyNew businesses – seed money– Investment opportunitiesInvestment opportunities
127127©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Planning Opportunities – Cont.Planning Opportunities – Cont.
Grantor trust income tax planningGrantor trust income tax planning
Sales of “hot” assets – IRC§ 751 Sales of “hot” assets – IRC§ 751
Structuring buy-sell arrangementsStructuring buy-sell arrangements
State income tax planningState income tax planning
Multi-jurisdictional asset protection planningMulti-jurisdictional asset protection planning
Private retirement planPrivate retirement plan
128128©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander
Planning Opportunities – Cont.Planning Opportunities – Cont.
Advanced Life Insurance PlanningAdvanced Life Insurance Planning– Access to cash valuesAccess to cash values– No transfer for value problemsNo transfer for value problems– Super-charge the insurance fundingSuper-charge the insurance funding– Super-charge life insurance partnership planningSuper-charge life insurance partnership planning– Premium financing techniquesPremium financing techniques– Split dollar arrangementsSplit dollar arrangements
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 129129
Physicians/Equipment LeasingPhysicians/Equipment Leasing
The doctors purchase $3 million worth of equipment in The doctors purchase $3 million worth of equipment in an LLCan LLC
Each doctor sell his/her 1/3 interest in the LLC to a BDIT Each doctor sell his/her 1/3 interest in the LLC to a BDIT for a notefor a note– Rev. Rul. 85-13Rev. Rul. 85-13– DiscountDiscount
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 130130
Physicians/Equipment LeasingPhysicians/Equipment Leasing- cont. -- cont. -
Equipment is leased to the medical practiceEquipment is leased to the medical practice
Cash flow from the equipment leasing businessCash flow from the equipment leasing business– Pays the notePays the note– Buys CVLIBuys CVLI
For retirement-pension substituteFor retirement-pension substitute
As an asset classAs an asset class
For family protectionFor family protection
For buy-sell purposesFor buy-sell purposes
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 131131
Buy-sell PlanningBuy-sell Planning
Newco is owned 50/50 by A and BNewco is owned 50/50 by A and B
A’s parent set up A’s BDIT which buys A’s entityA’s parent set up A’s BDIT which buys A’s entity
interest from Ainterest from A
B’s parent sets up B’s BDIT which buys B’s entity B’s parent sets up B’s BDIT which buys B’s entity interest from Binterest from B
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 132132
Buy-sell Planning Buy-sell Planning cont’dcont’d
Owns B’s interest Owns B’s interest
Buys Life Insurance on Buys Life Insurance on A’s LifeA’s Life
Owns A’s interest Owns A’s interest
Buys Life Insurance on Buys Life Insurance on B’s LifeB’s Life
A’s BDIT B’s BDIT
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 133133
Estate Planning for ProfessionalEstate Planning for Professional Athletes and Entertainers Athletes and Entertainers
Split between shiftable and non-assignableSplit between shiftable and non-assignable– A BDIT is wonderful for income opportunities which A BDIT is wonderful for income opportunities which
can be assignedcan be assigned
Athlete/entertainer pays the income tax on all incomeAthlete/entertainer pays the income tax on all income
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 134134
Estate Planning for ProfessionalEstate Planning for ProfessionalAthletes and Entertainers – cont.Athletes and Entertainers – cont.
Income tax and current expenditures deplete non-Income tax and current expenditures deplete non-assignable wealthassignable wealth
BDIT grows income tax-freeBDIT grows income tax-free– Divorce and creditor protectedDivorce and creditor protected
Better than a marital property agreementBetter than a marital property agreement– Cash value life insurance as a pension substitute or in Cash value life insurance as a pension substitute or in
addition to those provided by the sportaddition to those provided by the sport– Death benefit protects the familyDeath benefit protects the family
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 135135
Premium Financing StrategiesPremium Financing Strategies
Premium Financing strategies to ConsiderPremium Financing strategies to Consider– Private loan arrangementsPrivate loan arrangements– Bank loan arrangementsBank loan arrangements– Private split-dollar arrangementsPrivate split-dollar arrangements
Special thanks to Northwestern Mutual Life insurance Special thanks to Northwestern Mutual Life insurance Company in the preparation of slides 124-136. Used by Company in the preparation of slides 124-136. Used by permission, with modificationspermission, with modifications
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 136136
BackgroundBackground
Large life insurance needLarge life insurance need– Large premiumsLarge premiums
Often a 6 or 7 figure premiumOften a 6 or 7 figure premium
Insufficient gift tax capacityInsufficient gift tax capacity– However - No gifts allowed with the BDIT!However - No gifts allowed with the BDIT!
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 137137
BackgroundBackground
Client has cash flow or other assets available but must Client has cash flow or other assets available but must deal with gift tax limitsdeal with gift tax limits– However - No gifts allowed with the BDIT!However - No gifts allowed with the BDIT!
oror
Client wants flexibilityClient wants flexibility
oror
Client does not have sufficient cash flow or other assets Client does not have sufficient cash flow or other assets available and wants to avoid selling assetsavailable and wants to avoid selling assets
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 138138
Critical Planning Points With the BDIT!Critical Planning Points With the BDIT!
Private premium financing arrangementsPrivate premium financing arrangements– The arrangement must accrue interest at the AFR and The arrangement must accrue interest at the AFR and
pay the accrued interest with the principal at the end pay the accrued interest with the principal at the end of the term so that there is no deemed gift to the BDITof the term so that there is no deemed gift to the BDIT
Private split-dollar arrangementsPrivate split-dollar arrangements– The arrangement must be a contributory arrangementThe arrangement must be a contributory arrangement– The BDIT, from its own funds, must contribute the The BDIT, from its own funds, must contribute the
economic benefit portion of the premiumeconomic benefit portion of the premium
Therefore, initially the BDIT must be independently Therefore, initially the BDIT must be independently funded with sufficient assets to make these funded with sufficient assets to make these paymentspayments
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 139139
Premium Financing OverviewPremium Financing Overview
Personal (“private”) loansPersonal (“private”) loansRegular bank loansRegular bank loans pay interest in cashpay interest in cash accrue interestaccrue interest
Current trends: interest rates, estate taxesCurrent trends: interest rates, estate taxesPlanning flexibility Planning flexibility lend, don’t give lend, don’t giveNon-equity split dollarNon-equity split dollarExit strategiesExit strategies
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 140140
Private Financing: How It WorksPrivate Financing: How It Works
Life InsurancePolicy
PremiumsIns.
Co.
Client(s)
Loans
Interest
Gifts (= interest)
TRUST
Private Financing: Why Do It?Private Financing: Why Do It?
Low gifts Low gifts – interest < premiuminterest < premium
Generally lower interest rate than bank loanGenerally lower interest rate than bank loan
Gift tax efficient—gifts other than cash can be madeGift tax efficient—gifts other than cash can be made– However: No gifts allowed with the BDIT!However: No gifts allowed with the BDIT!
FlexibilityFlexibility
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 142142
Private Financing: Risks & DrawbacksPrivate Financing: Risks & Drawbacks
Does it make financial sense over the long term?Does it make financial sense over the long term?
Interest rates vary unless a lump sum is loanedInterest rates vary unless a lump sum is loaned
The cost of an increasing death benefit vs. the cost of a The cost of an increasing death benefit vs. the cost of a static death benefitstatic death benefit
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 143143
Bank Financing: How It WorksBank Financing: How It Works
Lender
Life InsurancePolicy
PremiumsIns.
Co.
Client(s)
Interest
Gifts (= interest)
Loans TRUST
Bank Financing: Why Do It?Bank Financing: Why Do It?
Lower out of pocket cost Lower out of pocket cost interest < premiuminterest < premium
Gift tax efficientGift tax efficient– However – No gifts allowed with the BDIT! However – No gifts allowed with the BDIT!
Other people’s moneyOther people’s money
Minimize the need to sell performing assetsMinimize the need to sell performing assets
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 145145
Bank Financing: Risks & DrawbacksBank Financing: Risks & Drawbacks
Does it make financial sense?Does it make financial sense?
Interest rate uncertaintyInterest rate uncertainty
Lender uncertaintyLender uncertainty
Additional time and expensesAdditional time and expenses
Collateral requirements in addition to policyCollateral requirements in addition to policy
Is grantor’s personal guarantee a gift?Is grantor’s personal guarantee a gift?
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 146146
Life InsurancePolicy
PremiumsIns.
Co.
Non-Equity Split Dollar: Non-Equity Split Dollar: How It WorksHow It Works
Client(s)
Prem. Payments
Term cost
Gifts (= term cost)
TRUST
Non-Equity Split Dollar: Non-Equity Split Dollar: Why Do It?Why Do It?
Term cost < premiumTerm cost < premium
Term cost < interestTerm cost < interest
Gift tax efficientGift tax efficient– However – No gifts allowed with a BDIT!However – No gifts allowed with a BDIT!
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 148148
Non Equity Split DollarNon Equity Split Dollar Risks & Drawbacks Risks & Drawbacks
Failure to terminate plan before:Failure to terminate plan before:
– CV significantly > premiums CV significantly > premiums
– Term cost gets too big (leverage is lost)Term cost gets too big (leverage is lost)
Works best for younger insuredsWorks best for younger insureds
©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert G. AlexanderG. Alexander 149149
Contact InformationContact Information
Robert G. Alexander, EsqRobert G. Alexander, Esq
Alexander & Klemmer, S.C.Alexander & Klemmer, S.C.
933 N. Mayfair Road, Suite 301933 N. Mayfair Road, Suite 301
Milwaukee, Wisconsin 53226Milwaukee, Wisconsin 53226
Tel: 414-476-5020Tel: 414-476-5020
E-mail: [email protected]: [email protected]
150150©2010 Richard A. Oshins and Robert ©2010 Richard A. Oshins and Robert
G. AlexanderG. Alexander