Virginia State Bar

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Trusts and Estates

A Section of the Virginia State Bar.

Spring 2015 Newsletter

Newsletter - Trusts and Estates

Volume 22, No. 12


Message from the Chair
C. Arthur Robinson, II, Chair
Trusts and Estates Section

On behalf of the Board of Governors of the Virginia State Bar Trusts and Estates Section, I am happy to introduce the Spring 2015 edition of the T&E Section Newsletter. In this issue we have four very interesting articles which speak to current topics and concerns for all of us.

In this issue Kathleen A. Kelley identifies The Top Five Mistakes in Drafting Limited Liability Company Agreements. LLCs are extremely flexible and powerful vehicles which can be used to do any number of things and accomplish significant estate planning objectives. As we all know, however, the devil is in the details. Kathleen’s article identifies five common mistakes in drafting LLC agreements which when not corrected can lead to significant problems with this otherwise very powerful planning tool.

Thomas D. Yates and Alvi Aggarwal have produced a thoughtful piece which discusses the process of maximizing basis for difficult-to-value assets in the case of non transfer taxable estates. As several authors have recently pointed out in a wide variety of publications, the focus of our planning has changed in recent years. We are now spending considerable time dealing with income tax efficiency which, in the context of inherited assets, means maximizing the basis of assets. This article walks through the landscape of how to value hard-to-value assets, the proper use of appraisals, and the pitfalls and concerns where the process of valuation is not properly documented with sufficient evidence to withstand the scrutiny of the Internal Revenue Service.

Melinda Merk explores joint revocable trusts and discusses the ins and outs of using these vehicles in common law property states. Given that in many cases transfer taxes are no longer a significant concern for our clients, the emphasis on simplification is greater than ever. One potential technique that allows for this simplification is the use of a joint revocable trust. However, as Melinda’s article points out, joint revocable trusts carry with them a series of complexities that have to be appropriately dealt with in order to ensure that an otherwise simple instrument does not create significant complications. Her article is a thorough and thoughtful examination of both the pros and cons of joint revocable trusts and will make an excellent reference with respect to this area going forward.

Finally, Joanne Marcus has provided a planning suggestion for special needs trust planning which will be useful in many instances. As she points out, a freestanding special needs trust may often times be impractical based on the amount of assets a family seeks to retain in trust. Depending on the availability of resources, a pooled special needs trust run by an experienced charitable organization can be a viable alternative in this planning area.

We would like to thank our newsletter editor C. Daniel Vaughan and assistant newsletter editor Lauren Jenkins for their work in producing this Spring Newsletter. As I am sure you are all aware, in February, an issue of the Virginia Lawyer dedicated to trust and estate issues was provided and our editors worked tirelessly to make that publication a credit to our Section. Please visit our website at https://www.vsb.org/site/sections/trustandestates for additional information. Please feel free to contact me or any other member of the Board of Governors with any ideas or inputs of Section activities and let us know if there is any way that we can improve the offerings of our Section.

As a final note, it has been my pleasure to serve as Chair of the Trusts and Estates Section for fiscal year 2014/2015 and I am confident that our incoming Board will continue to make the Section relevant and valuable to its members.

Spring 2015 Newsletter (.pdf)

The Trusts and Estates Newsletter is published by the Virginia State Bar Section on Trusts and Estates for its members to provide information to attorneys practicing in these areas. Statements, expressions of opinion, or comments appearing herein are those of the contributors and not necessarily those of the Virginia State Bar or the Section on Trusts and Estates.