Mumbai, India

Common myths about determinate (non-discretionary) trusts

By Ashishkumar Bairagra

1. A trust, where the shares of the beneficiaries are determined in the trust deed, can only be considered to be a determinate trust.

When the shares of the beneficiaries are determinate, a trust is commonly considered to be “transparent” for tax purposes, and the beneficiaries are liable for tax on their proportionate share of income from the trust. Even if the beneficiaries' shares are determined after the formation of the trust (e.g. by way of contributions in an investment fund by different investors or by way of a resolution passed by the trustees or any other mechanism), the trust can be considered to be a determinate trust.

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Fort Lauderdale, USA

The benefit of dynasty trusts

By Steven Shane, Offit Kurman

Nothing lasts forever. For trusts, there is a somewhat arcane law in the United States called the Rule Against Perpetuities which prevents a trust from lasting “too” long. Many states have abolished their Rule Against Perpetuities laws to permit trusts to have indefinite duration, opening the legal door for dynasty trusts. Combined with: (i) steady increases in the federal estate, gift, and generation-skipping transfer tax exemptions (currently USD 12.06 million per person in 2022); (ii) the scheduled sunsetting of the most recent increase which will cut exemption amounts in half at the end of 2025; and (iii) the looming possibility of tax legislation aiming to curtail common tax planning strategies, wealthy families have been creating “dynastic” trusts that are exempt from transfer taxes and protected from creditors often for multiple generations.

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Tales from the Crypt(o): Estate planning for cryptocurrency

By Kelsey M. Scanlan, Moss & Barnett

Mainstream interest in cryptocurrency has skyrocketed over the last few years. Despite digital currencies plummeting nearly USD 2 trillion in value since peaking in late 2021, the market continues to grow. As of May 2022, one in five Americans has invested, traded, or used cryptocurrencies. An estimated 46.5 million more Americans are expected to invest in cryptocurrencies for the first time this year.

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senior golfers

Private placement life insurance

By Jolene Tan, SingAlliance

As the needs of HNW individuals and families evolve, private placement life insurance (PPLI) has emerged as an effective tool in wealth planning. As its name suggests, it is a sophisticated unit-linked life insurance contract tailored to each client's unique needs.

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London, UK

Information sharing and risk of harm

By Sati Virdee, Citroen Wells Chartered Accountants

The Fifth Money Laundering Directive came into effect in October 2020 and extended the scope of the UK Government’s Trust Registration Service (TRS). This article will focus on one of those changes.

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Sydney, Australia

Trust distributions have changed – retrospectively

By Tony Nunes, Kelly + Partners Chartered Accountants

Where a discretionary trust makes a distribution to a foreign resident, and net income of the trust includes foreign- sourced income or is otherwise subject to withholding tax in Australia, consideration should be given to whether a reimbursement agreement exists.

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Chicago, USA

1202 Exclusion – Cash-Flow Benefits for All

By Jodi T. Mersinger, Cendrowski Corporate Advisors LLC

Section 1202 of the US Internal Revenue Code can provide valuable tax savings to US citizens, and US resident aliens, who are investors in certain US corporations. Such a corporation is referred to as a Qualified Small Business (“QSB”), which must meet certain requirements and conduct a qualified trade or business (excludes professional services, real estate, and hospitality).

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The main components of estate planning

By Prof Sergio Guerrero Rosas, Guerrero y Santana, S.C.

Throughout our professional life, we see many instances where people consider having a will or a trust is enough to ensure solid estate planning. However, there are certain items that we must take care of and take into account to guarantee the adequate protection of our fixed assets and belongings, and to ensure that succession and the transfer of assets are carried out exactly according to our wishes and that taxes are optimised to the maximum. In order to achieve this, it is important that our estate planning considers and contains at least the following items:

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Legacy planning with digital assets

By Jolene Tan, SingAlliance Pte Ltd

The advent of the digital age has harnessed the rise of digital assets such as cryptocurrencies and nonfungible tokens. As more look to invest in this space, many have yet to consider its inclusion in estate planning. However, it is a critical consideration and some might argue it is more crucial than traditional assets. This is because of its decentralised nature, market volatility, the lack of personal linkage to demonstrate ownership, as well as the issue of how the keys are stored – in an electronic device.

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