Reading 30 - Estate Planning in a Global Context - Stephen M. Horan, Thomas R Robinson
1. Estate planning is critical component of wealth management of private clients
2. In a fixed trust the settelor has pre-determined the distribution pattern of assets to the benficiary
3. If a trustee has sole and uncontrolled discretion of trust assets to the beneficiary, the trust is known as discretionary trust. In such as trust, the trust beneficiary is not the legal owner of trust assets and creditors cannot reach out to trust assets in case they have a claim against the beneficiary.
4. Explicit assets include financial assets, real estate, etc. Implied assets include human captial or expected pension benefits.
5. Explict liabilities include motrgages, loans. Implied liabilities include capitalized value of investor's spending goals
6. Following elements impact the taxation of testamentary transfers
- Residency of the donor
- Residency of the recepient
- Type of asset
- Location of the asset
7. Residence-source is the most common source of double taxation and most difficult avoid through double taxation and most difficult to avoid throught tax planning
8. 1 Trust is not a legal entity. It is a relationship in which trustee holds and manages the assets for the benefit of trust beneficiaries.
8.2 The legal concept of trust is unique to the common law. Civil law countries may not recogize foreign trusts because it is a legal relationship, not a legal person.
9. Shadow period - If an exit tax includes a period of income tax on income earned over a fixed period of expatriation, the fixed period is said to be a shadow period
10. Lifetime gratitious transfers aka inter vivos transfers
11. Under community property regimes, each spouse has an indivisible one-half interest in income earned during marriage.
12. A controlled foreign company is a company located outside a taxpayer's home country and in which tax payer has a controlling interest as defined by the home country law
13. The amount of core captial needed to mantian an invesror's lifestyle in a probabilistic can be estimated in a number of ways