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ALI-ABA Course of Study International Trust and Estate ... - ALI CLE

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					                                   ALI-ABA Course of Study
                            International Trust and Estate Planning
                                      August 18 - 19, 2011
                                    San Francisco, California


                                    TABLE OF CONTENTS
                                                                                             Page
PROGRAM                                                                                        xi
FACULTY PARTICIPANTS                                                                          xv
STUDY MATERIALS
1. Income Taxation of Non-Resident Aliens                                                      1
   By Michael J. Miller
2. Transfer Taxation of Non-Resident Aliens                                                   13
   By Charlotte K. Ito
      Presentation Slides                                                                     26
3. Foreign Trusts and Alternative Vehicles                                                    33
   By Henry Christensen, III
4. Don’t Block the Box: U.S. Federal Income Tax Issues for Trusts and Estates That Own        63
   Shares in Foreign Corporations
   By M. Read Moore
      Table of Contents                                                                       64
      Study Material                                                                          65
5. Outbound Transfers Code Sections 679 and 684                                              137
   By Robert C. Lawrence, III
      Table of Contents                                                                      138
      Study Material                                                                         139
6. Enforcement Issues in Offshore Planning in 2011: Clients, Fiduciaries and Practitioners   159
   Increasingly Caught Between Overlapping and Conflicting Laws and Ethics
   By Bruce Zagaris
      Table of Contents                                                                      161
      Study Material                                                                         163
7. Marital Deduction Planning for Non-U.S. Citizen Spouses                                   237
   By Michelle B. Graham
      Table of Contents                                                                      238
      Study Material                                                                         241
      Exhibit A. Statement of Information                                                    277
      Exhibit B: Agreement to Pay Section 2056A Estate Tax                                   279
      Exhibit C: Agreement to Roll Over Annuity Payments                                     280
      Exhibit D: Form of Bond                                                                281
      Exhibit E: Form of Letter of Credit                                                    283
      Presentation Slides                                                                    285




                                              vii
8. Asset Protection Trusts (APTs): Non-Tax Issues                                             293
   By Frederick J. Tansill
      Table of Contents                                                                       295
      Study Material                                                                          301
      Exhibit A: Overview of Selected [Offshore] Jurisdictions                                379
      Exhibit B: Domestic Venues for Asset Protection Trusts                                  398
      Exhibit C: Local Counsel and Representative Banks and Trust Companies in Certain
      Offshore Jurisdictions                                                                  415
      Exhibit 1: Affidavit of Solvency (Sample)                                               418
      Exhibit 2: “Island Castaways”                                                           424
      Exhibit 3: “What ACTEC Fellows Should Know About Asset Protection”                      429
      Exhibit 4: No U.S. Connections Allowed With an Offshore Trust? Wrong! Use Onshore
      Contracts                                                                               437
      Exhibit 5: “The Ruse That Roared”                                                       443
      Exhibit 6: Letter of Wishes (Sample)                                                    448
      Exhibit 7: “Litigation Boom Spurs Efforts to Shield Assets”                             450
      Exhibit 8: “Shelter from the Storm”                                                     454
9. The State of Expatriation 2011(3)                                                          537
   By Michael G. Pfeifer
10. U.S. Immigration and Citizenship Planning for High Net Worth Clients                      565
    By Stephen Trow
      Presentation Slides                                                                     589
11. Offshore Tax Enforcement, Voluntary Disclosures and Undeclared Foreign Accounts –         607
    2011
    By Scott D. Michel
      Study Material                                                                          609
      Exhibit 1: IRS Criminal Investigation OVDI Follow Up Questions                          643
      Exhibit 2: High Net Worth Audit Information Document Request                            646
      Exhibit 3: Final Rules and New “FBAR” Form Issued                                       658
      Exhibit 4: TDF 90-22.1 (“FBAR”) and Instructions                                        661
      Exhibit 5: Draft IRS Form 8938                                                          670
      Presentation Slides                                                                     673
12. Developments in Offshore Tax Compliance                                                   683
    By John C. McDougal
13. Questions for Ethics Roundtable                                                           745
    By Michael G. Pfeifer
14. Taxing Foreign Nongrantor Trusts and Their US Beneficiaries                               753
    By Carlyn S. McCaffrey
15. Divided by a common law?                                                                  853
    by Shan Warnock-Smith QC and Andrew De La Rosa
16. Enforcement Issues in Offshore Planning in 2011: Clients, Fiduciaries and Practitioners   885
    Increasingly Caught by Overlapping & Conflicting Laws & Ethics
    By Bruce Zagaris
17. The Mogranthau Letter                                                                     973
    Submitted by John C. McDougal
                                              viii
18. Exhibit C: Local Counsel and Representative Banks and Trust Companies            987
    By Frederick J. Tansill
19. U.S. Taxation of Foreign Trusts, Trusts with Non-U.S. Grantors and Their U.S.   1001
    Beneficiaries*
    By Ellen K. Harrison, Elyse G. Kirschner, and Carlyn S. McCaffrey
      Study Materials                                                               1003
      PowerPoint Presentation                                                       1099




                                             ix
2
                              ALI-ABA Course of Study
                       International Trust and Estate Planning

                                  August 18-19, 2011
                                San Francisco, California

                                      PROGRAM

Thursday, August 18, 2011
7:45 a.m. Registration and Networking Session
8:40 a.m. Administrative Remarks - ALI-ABA Staff

WEBCAST SEGMENT A: TAXATION OF NONRESIDENT ALIENS; IMPACT OF
TREATIES AND FOREIGN LAW
8:45 a.m. Opening Remarks and Course Overview - Messrs. Moore and Pfeifer
9:00 a.m. Income Taxation of Nonresident Aliens (NRAs) - Mr. Miller
General "residence" rules; problems with short-term nonresidence; taxation of investment
income, business income, and real estate income; compliance issues; use of income tax
treaties and dual status returns
9:45 a.m. Transfer Taxation of NRAs - Ms. Ito
"Domicile" as the basis of taxation; substantive gift, estate, and GST tax rules; planning
for NRAs with U.S. situs property; use of estate and gift tax treaties
10:30 a.m. Networking and Refreshment Break
10:45 a.m. Trusts and Alternative Foreign Vehicles - Mr. Christensen
U.S. tax definition of "trust"; U.S. tax treatment of civil law constructs (anstalts,
foundations, and usufructs); civil law treatment of common law trusts, including recent
case law; effect of the Hague Convention
11:30 a.m. Important English Trust Law Issues for American Lawyers – Mr. de la
Rosa and Ms. Warnock-Smith
Exploration of critical differences in English and American trust law and styles of trust
drafting that affect U.S. lawyers working in the international trusts and estates field,
including the use of discretionary trusts, protectors, powers of advancement, and
indemnities; consideration of choice of law issues; issues related to court proceedings
involving trusts and estates in offshore jurisdictions
12:15 p.m. Lunch Break

WEBCAST SEGMENT B: TREATMENT OF "OUTBOUND" GRANTOR TRUSTS
OF U.S. PERSONS; ETHICAL ISSUES IN INTERNATIONAL PLANNING
1:45 p.m. Considerations for Underlying Foreign Corporations - Mr. Moore
Overview of U.S. anti-deferral tax regimes: CFCs and PFICs; attribution of ownership
through trusts; planning considerations for U.S. owners and beneficiaries, including use
of "check-the-box" rules
2:30 p.m. “Outbound” Grantor Trusts of U.S. Persons - Mr. Lawrence
Taxation of U.S. grantors of foreign trusts with U.S. beneficiaries; Sections 679 and 684;
direct and indirect transfers; "qualified obligations"
3:15 p.m. Networking and Refreshment Break



                                          xi
3:30 p.m. Ethical Issues in Offshore Planning - Mr. Zagaris
Application of due diligence and "know-your-client" principles to lawyers involved in
wealth planning and management; update on anti-tax haven initiatives: organization for
Economic Cooperation and Development (OECD), Financial Action Task Force (FATF),
Financial Stability Forum (FSF), etc.; limits on "bank secrecy" and practical lessons of
dealing with increasingly complex tax and regulatory regimes
4:15 p.m. Ethics Roundtable - Faculty Panel
5:00 p.m. Questions and Answers
5:15 p.m. Adjournment for the Day; Networking Reception for Registrants and
Faculty

Friday, August 19, 2011
8:00 a.m. Continental Breakfast and Networking Session

WEBCAST SEGMENT C: TAXATION OF FOREIGN TRUSTS AND TRUSTS
WITH FOREIGN SETTLORS; MARITAL PLANNING FOR FOREIGN SPOUSES;
USE OF OFFSHORE INSURANCE PRODUCTS
8:30 a.m. Planning Chairs' Recap of Day One - Messrs. Moore and Pfeifer
8:45 a.m. “Inbound” Grantor Trusts - Ms. Harrison
Definition of "grantor"; limits on foreign grantor trusts; treatment of indirect
distributions; anti-avoidance rules; pre-immigration trusts
9:30 a.m. Foreign Non-Grantor Trusts - Ms. McCaffrey
Taxation of, and planning with, foreign non-grantor trusts; alternatives for reporting
distributions to U.S. beneficiaries
10:15 a.m. Networking and Refreshment Break
10:30 a.m. Marital Deduction Planning for Non-Citizen Spouses – Ms. Graham
Limitations on availability of marital deduction where spouse is not a U.S. citizen;
lifetime planning and use of "qualified domestic trusts" (QDOTs) at death; qualifying
retirement benefits for marital deduction; pre- and post-mortem planning to minimize
limitations
11:15 a.m. “Asset Protection Trusts” (APTs): Non-Tax Issues - Mr. Tansill
Proper objectives of APTs; factors in choosing the "best jurisdiction"; U.S. and foreign
APTs: Are they equal?
12:00 noon Lunch Break

WEBCAST SEGMENT D: SPECIAL ISSUES (EXPATRIATION AND ASSET
PROTECTION TRUSTS); ISSUES IN OFFSHORE TAX COMPLIANCE
1:30 p.m. Expatriation - Mr. Pfeifer
Expatriation provisions after 2008 HEART Act changes; problems with scope and
administration of "mark-to-market," deferred compensation and non- grantor trust
provisions; new Section 2801 "inheritance" tax; practical issues with advising citizens
and long-term residents
2:15 p.m. U.S. Immigration and Citizenship – Mr. Trow
Immigration planning for high net worth clients; common non-immigrant (temporary)
visas; investment-based options for obtaining permanent resident (green card) status;
obtaining and terminating American citizenship



                                          xii
3:00 p.m. Networking and Refreshment Break
3:15 p.m. Developments in Offshore Tax Compliance (Practitioner View) - Mr.
Michel
Targeted and pattern document requests and examinations; changes to taxpayer
"voluntary disclosure" policy and procedure; statutes of limitation in the international tax
area; implications of HIRE/FATCA reporting provisions, and recent developments with
foreign financial account reporting on Form TDF 90-22.1 ("FBAR"); IRS enforcement
policies and their application, including penalty exposure
4:00 p.m. Developments in Offshore Tax Compliance (IRS View) - Mr. McDougal
Updates on recent IRS initiatives to identify taxpayers with undisclosed offshore
financial accounts and transactions: Offshore credit cards, offshore merchant accounts,
offshore private banking and more; expanding limits of offshore information gathering
and enforcement; hearings of Senate Permanent Subcommittee on Investigations; IRS
view of taxpayer voluntary disclosure procedure
4:45 p.m. Questions and Answers
5:00 p.m. Adjournment

Total 60-minute hours of instruction: 13, including 1.5 hours of ethics




                                          xiii
2
                                   ALI-ABA Course of Study
                            International Trust and Estate Planning

                                     August 18-19, 2011
                                   San Francisco, California

                                    PLANNING CHAIRS


Michael G. Pfeifer, Esquire                        M. Read Moore, Esquire
Caplin & Drysdale, Chartered                       McDermott Will & Emery LLP
Suite 1100                                         227 West Monroe Street
One Thomas Circle, NW                              Chicago, IL 60606
Washington, DC 20005


                                          FACULTY

Henry Christensen III, Esquire                     Robert C. Lawrence, III, Esquire
McDermott Will & Emery LLP                         Cadwalader, Wickersham & Taft LLP
340 Madison Avenue                                 One World Financial Center
New York, NY 10173                                 New York, NY 10281

Mr. Andrew de la Rosa                              Carlyn S. McCaffrey, Esquire
International Chancery & Trusts Chambers           McDermott Will & Emery
PO Box 10100                                       340 Madison Avenue
5th Floor, Queensgate House                        New York, NY 10173
South Church Street
Grand Cayman KY1-1001                              John C. McDougal, Esquire
                                                   Office of Chief Counsel, Small
Michelle B. Graham, Esquire                        Business/Self Employed Division
Luce Forward Hamilton & Scripps, LLP               Internal Revenue Service
P.O. Box 2329                                      U.S. Dept of the Treasury
Rancho Santa Fe, CA 92067                          Main Street Center Suite 1601
                                                   600 East Main Street
Ellen K. Harrison, Esquire                         Richmond, VA 23219
Pillsbury Winthrop Shaw Pittman LLP
2300 N Street, NW                                  Scott D. Michel, Esquire
Washington, DC 20037                               Caplin & Drysdale, Chartered
                                                   Suite 1100
Charlotte K. Ito, Esquire                          One Thomas Circle NW
Fox Rothschild LLP                                 Washington, DC 20005
Suite 1500
235 Pine Street
San Francisco, CA 94104




                                            xv
Michael J. Miller, Esquire                        Shân Warnock-Smith, QC
Roberts & Holland LLP                             International Chancery & Trusts Chambers
Suite 3700                                        PO Box 10100
825 Eight Avenue                                  5th Floor, Queensgate House
New York, NY 10019                                South Church Street
                                                  Grand Cayman KY1-1001
Frederick J. Tansill, Esquire
Frederick J. Tansill & Associates, LLC            Bruce Zagaris, Esquire
Suite 104                                         Berliner, Corcoran & Rowe, L.L.P.
6723 Whittier Avenue                              Suite 1100
McLean, VA 22101                                  1101 17th Street, NW
                                                  Washington, DC 20036
Stephen Trow, Esquire
Trow & Rahal, P.C.
Suite 920
5335 Wisconsin Avenue, NW
Washington, DC 20015



NOTE: Please go to www.ali-aba.org/CT012 for biographical information about this faculty.




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