1. The Other Side of the Estate Planning Fence: Working with Lawyers and Accountants
Jeanne C. Blackmore, Esq.

2. Introduction Overview of basic estate planning
Review of current federal and state estate tax laws
Review of new income tax rules on charitable giving
Review of common charitable giving structures

3. Basics of Estate Planning
End of life care documents
Guardian designation
Structuring the estate plan to avoid probate and to mitigate estate taxes
Deciding how to dispose of assets after death

4. Why Charitable Giving? Minimize estate taxes
Children are adequately provided for
Sufficient assets to provide for children and engage in philanthropy
Want to leave a philanthropic legacy
Philanthropy is important to family culture

5. Components of Basic Estate Plan
General Power of Attorney
Advanced Directive for Health Care
Pour-over Will
Revocable Trust (or two, if taxable estate in Vermont)
Other stuff:
Bill of Sale for personal property
Deeds
Assignments of business interests
Beneficiary and transfer on death designations

6. Overview of a Non-Taxable Estate
Will
For
Husband
Will
For
Wife
Wills pour stuff into trust if you forget to put it there during life, or you mess up a beneficiary designation
Joint
Trust
Put stuff in trust during life to avoid probate on death
To the kids in equal shares on the second death

7. Overview of Taxable Estate
Will
For
Husband
Will
For
Wife
Will pours stuff into trust if you forget to put it there during life, or you mess up a beneficiary designation
Put stuff in trust during life to avoid probate on death
Trust
With
Trust B
Trust
With
Trust B
For benefit of surviving spouse on first death
To the kids in equal shares on the second death
No estate tax until second death

8. What the heck is probate?

9. Probate Applies to assets that do not pass automatically on death
Process of transferring title from the decedent to the intended recipient under the will or laws of intestacy
No probate:
Assets with a beneficiary designation: retirement accounts, life insurance, bank accounts with a payable on death designation
Jointly-held assets – real estate, bank accounts
Assets titled in trust during the decedent’s life time
Probate: Pretty much everything else

10. Introduction Overview of basic estate planning
Review of current federal and state estate tax laws
Review of new income tax rules on charitable giving
Review of common charitable giving structures

11. Review of Current Estate Tax Laws
Federal estate tax
Exemption about $11.2 million per person
Portable between spouses
Sunsets in 2025 and returns to $5.5 million per person exemption
Unified transfer tax regime covers gifts during life and bequests on death

12. Review of Current Estate Tax Laws, Continued
Vermont estate tax
Exemption is $2.75 million per person
Not portable between spouses
Flat rate of 16%
No unified transfer tax regime. Gifts subject to tax only if made less than 2 years before death.

13. Vermont Taxable Estate
Will
For
Husband
Will
For
Wife
Trust
With
Trust B
Trust
With
Trust B
For benefit of surviving spouse on first death
To the kids in equal shares on the second death
No estate tax until second death

14. The Pie in a Taxable Estate
For the kids
For the government
For charity
If one gets more the other gets less

15. The Pie in a Non-Taxable Estate
For the kids
For charity
If one gets more the other gets less

16. Impact of Current Estate Tax Laws
Estate tax no longer a motivating factor for charitable giving
For folks with charitable intentions and large retirement assets, these remain the most tax efficient assets to donate

17. Introduction Overview of basic estate planning
Review of current federal and state estate tax laws
Review of new income tax rules on charitable giving
Review of common charitable giving structures

18. Review of Current Income Tax Laws
Tax Cuts and Jobs Act
Reduced income tax rate brackets
Personal exemption eliminated
Standard deduction increased
Itemized deductions curtailed or eliminated

19. Review of Current Income Tax Laws, cont’d
Miscellaneous deductions eliminated
Deduction for qualified business income added
Charitable deductions remain deductible
Cash donations generally deductible up to 60% of adjusted gross income

20. Introduction Overview of basic estate planning
Review of current federal and state estate tax laws
Review of new income tax rules on charitable giving
Review of common charitable giving structures

21. Popular Charitable Giving Structures
Outright Gifts
Charitable Remainder Trust
Donor Advised Fund
Private Foundation

22. Outright Gifts Bequest by will or trust?
Subject to probate court oversight?
Trust administration requirements adequate?
Size of Bequest?
Use percentage bequest to ensure portion of estate for children
Make bequest by reference to a schedule
Adequate to eliminate estate tax

23. Outright Gifts, continued
Should the charity be notified of the bequest?
Help with planning and budgeting
Avoid pressure from charity
Should the terms of the bequest be restricted?
Revoked if administration of bequest noncompliant?
Require the charity to commit to certain terms?
Should the charitable recipient be subject to a contingency?

24. Charitable Remainder Trust
Funded during life, on death, or both
Create income stream for Donor(s) or other lifetime beneficiary
Subject to strict statutory and regulatory scheme
Scheme does allow some flexibility
Can allow trustee, income beneficiary or even the Donor to change the charitable remainderman

25. Donor Advised Fund Benefit of working with philanthropic advisors
Flexibility during life and, for family, on death
Ease of Administration

26. Private Foundation Leave a philanthropic legacy
Family must be interested in maintaining this legacy
Create and fund during life, on death, or both
Must apply to IRS for tax-exempt status
Must comply with corporate governance requirements
Administration presents significant complexities
Complex statutory and regulatory scheme

27. Introduction Overview of basic estate planning
Review of current federal and state estate tax laws
Review of new income tax rules on charitable giving
Review of common charitable giving structures

28. Conclusion: the Lawyers Point of View
Charitable giving is a component of basic estate planning, but is not typically the primary focus
Clients with philanthropic intent want flexibility and accountability in their structured giving
Estate tax is no longer an incentive for charitable giving in most cases