I make sure to tell my clients that in order to qualify the premium payments as “gift tax free” a certain procedure should be followed. The Trustee of the ILIT should have a tax identification number and then create a checking account. This should be done with plenty of time (at least 45 days) prior to the date the annual premium is due. Next, the Trustee should send out the Crummey Letters to the beneficiaries of the ILIT. This advises the beneficiaries of the contribution to the ILIT and informing them that they have a certain time period under the terms of the ILIT where they can withdraw the funds which are attributed to their shares. Continue reading
The timing and location of telling your children you are getting divorced is one of the first considerations when going through a divorce process. The first recommendation is for both parents to tell the children together that they have decided that they will no longer be married, are planning a separation or whatever event will occur. Both parents must actively tell and should never blame the other. The discussion should not be had by only one parent, as it should be shared. Continue reading
A closely held corporation owned by one spouse may be the most valuable asset in a divorce proceeding and may cause financial hardship to the business owning spouse. Traditionally, a divorce includes dividing assets, awarding spousal support, and if joint children are involved, awarding child support. The concept of double dipping complicates this divisional split. Double dipping traditionally applied to the division of assets for pensions. Double dipping, however, is now being applied in the context of businesses. Double dipping occurs when the business is categorized as property subject to equitable distribution and again as a stream of income subject to the spousal award.