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  • Feb 05, 2020The Secure Act and Its Impact on Your Estate Plan

    As the festivities of the New Year have waned and we approach Tax Season, we bring you news of a recent legislative development that warrants your attention and may require changes to your estate plan. During the final weeks of 2019, Congress enacted federal tax legislation known as the “SECURE Act.”

    The SECURE Act

    The law makes important changes to the federal tax code that will impact distributions from retirement accounts such as 401(k)s, 403(bs)s, IRAs, and tax-qualified annuities (referred to in this legal advisory collectively as “Retirement Accounts”). Those changes may affect you during your lifetime and may also affect the way Retirement Accounts are distributed to your beneficiaries after your death. Consequently, the law may also limit your ability to protect retirement accounts from your beneficiaries’ creditors in a tax-efficient manner.

    This legal advisory summarizes the key aspects of the SECURE Act, which is effective as of January 1, 2020, that may affect your estate plan. We hope you find it helpful in understanding certain major changes enacted by this legislation and how they might affect you. However, bear in mind that the law will affect everyone differently. Therefore, we strongly urge you to contact our office to arrange a time for us to discuss this new law in detail, so that we may act to make any necessary revisions to your estate plan as soon as possible.

    Changes Affecting You

    One component of the SECURE Act that will affect many people during their lives is a change in the age at which a person must begin taking distributions from a Retirement Account. Prior to the SECURE Act, most people (except those who were not yet retired) were required to begin taking distributions from Retirement Accounts by April 1st of the year following the year in which they reached age 70 ½. Under the SECURE Act, the age is increased to 72 for those who were not yet required to take distributions under the old law.

    Also, the SECURE Act removes the age cap for funding traditional (non-Roth) IRAs, meaning that qualifying individuals over age 70½ are now eligible to make deductible and nondeductible contributions to a traditional IRA (and may, in some instances, present additional opportunities for funding a Roth IRA).

    These changes involve additional detail and nuance beyond the summary provided in this Alert and may present an opportunity for some to take further advantage of the tax-deferred savings offered by Retirement Accounts. Feel free to reach out to any member of the Norris McLaughlin Trust, Estate, and Individual Tax Law Practice Group to discuss those opportunities in coordination with your accountant or financial advisor.

    Changes Affecting Your Beneficiaries

    Perhaps the most significant changes concerning estate planning brought about by the SECURE Act regard how Retirement Accounts are distributed after the account holder’s death to avoid penalties while continuing to defer taxes. Under prior law, it was possible to “stretch” the distribution of inherited Retirement Accounts over the life expectancy of a beneficiary. Beneficiaries were required to take a required minimum distribution each year based on their life expectancy and the undistributed balance of the Retirement Account could continue to grow income tax-free. Better yet, leaving the balance of a Retirement Account to a trust, properly drafted to meet IRS requirement, for the benefit of a beneficiary, could protect retirement benefits from the beneficiary’s creditors and ensure that those benefits remain in the family upon the beneficiary’s death, while still benefiting from income tax-free growth for the undistributed portion of the Retirement Account.

    The SECURE Act has changed those rules so that most beneficiaries will be required to receive the full amount of an inherited Retirement Account within 10 years of the death of the person who funded the Retirement Account. Certain beneficiaries, including your spouse; your minor children (but not grandchildren); and beneficiaries who are disabled, chronically ill, or no more than 10 years younger than you, are exempt from the 10-year rule and are still permitted to take distributions over their expected lifetimes (although, children who are minors at the time of inheritance must now take the full distribution within 10 years of reaching the age of majority). However, Retirement Accounts left to those beneficiaries in trust might not qualify for the life expectancy payout, depending on the terms of the trust. Even special needs trusts might require review, as they must be structured narrowly to ensure that the stretch is preserved. Provisions that allow the trust to benefit another individual might be problematic.

    The good news is that the SECURE Act does not change the method of designating your beneficiaries to receive Retirement Accounts. If you have existing beneficiary designations in place, those designations are still valid. However, the SECURE Act does introduce a host of new considerations that must be taken into account when structuring your estate plan to maximize the benefit of Retirement Accounts and best protect your beneficiaries.

    Unfortunately, Congress gave us little warning that these changes were imminent. Accordingly, estate plans that previously offered a sound approach to planning for Retirement Accounts may no longer provide a good solution.  For example, some of you may have plans in place that leave Retirement Accounts to a trust known as a “Conduit Trust.” All distributions from Retirement Accounts paid to a Conduit Trust must be distributed directly from the Trust to the beneficiary. That might have been a good approach under the old law since distributions could be stretched over the expected lifetime of the trust beneficiary. However, under the SECURE Act, that same Conduit Trust might now require distribution of the entire Retirement Account to the beneficiary within 10 years of the death of the account owner or upon a minor child reaching the age of majority. Depending on the circumstances, under the SECURE Act, other planning techniques might better serve the goals those plans are meant to achieve.

    Take Action

    With the implementation of the SECURE Act effective January 1st of this year, we recommend that we review your estate plan as soon as possible to ensure that it disposes of your Retirement Accounts in keeping with your objectives.  We welcome the opportunity to discuss these changes with you, answer any questions you may have, and make recommendations specifically for you. Please contact our office to arrange a meeting or phone conference at your earliest convenience so that we can help you find the best planning solutions to meet your needs and those of your family.

    Note:  The contents of this letter are for informational purposes only and are not intended to constitute legal advice or form an attorney-client relationship. For information and advice particular to your situation, please contact one of the following attorneys in our Trust, Estate & Individual Tax Practice Group:  A. Nichole Cipriani, James J. Costello, Jr., Shauna M. Deans, Nicholas J. Dimakos, Robert E. Donatelli, Victor S. Elgort, Michelle M. Forsell, Hon. Emil Giordano (Ret.), Christopher R. Gray, Judith A. Harris, Abbey M. Horwitz, Dolores A. Laputka, Jill Lebowitz, Kenneth D. Meskin, Michael T. Reilly, Shana Siegel, Milan D. Slak, Burt Allen Solomon.

    Posted in: A. Nichole Cipriani, Abbey M. Horwitz, Burt Allen Solomon, Christopher R. Gray, Dolores A. Laputka, Estate Planning & Administration, Hon. Emil Giordano (Ret.), James J. Costello, Jill Lebowitz, Judith A. Harris, Kenneth D. Meskin, Michael T. Reilly, Michelle M. Forsell, Milan D. Slak, Nicholas J. Dimakos, Robert E. Donatelli, Shana Siegel, Shauna M. Deans, Taxation, Victor S. Elgort |

  • Nov 04, 2019Victor Elgort to Present on LLCs From Start to Finish for National Business Institute

    Victor S. Elgort, a Member of law firm Norris McLaughlin, P.A., will speak at the National Business Institute’s seminar, “LLCs From Start to Finish,” in Cherry Hill this month.

    About the Presentation

    “As an active member and contributor to the Institute, I am proud to once again present at a continuing education seminar hosted by NBI,” stated Elgort. He will lecture principally on “LLC or S-Corp Tax Considerations” and “How to Draft the LLC Operating Agreement,” focusing on formation issues, self-employment tax issues, qualified subchapter s subsidiaries, formation provisions, and more.

    The two-day seminar, approved for 14.40 NJ and 14 NY CLE credits, 12 PA CLE credits, and 14 CPE credits, will be held Monday, November 4 to Tuesday, November 5, at the Holiday Inn Philadelphia-Cherry Hill. For more information or to register, please visit the NBI website.

    About Victor Elgort

    Elgort often speaks at seminars on structuring complex LLC and partnership transactions. He is Chair Emeritus of the firm’s Tax Group, practicing out of all three Norris McLaughlin locations, as he is admitted in New Jersey, New York, and Pennsylvania. His practice concentrates on business law and tax planning, including the structuring of partnerships and joint ventures, tax-saving real estate and business exit strategies, executive compensation, and domestic and international estate planning matters.

    Elgort organized and created the first limited liability company in New Jersey.  He authored the standard form operating agreements and other documents for limited liability companies published by Julius Blumberg, Inc., including both the forms for use in New Jersey and the generic forms offered nationwide for limited liability companies.

    In addition, Elgort is a Fellow of the American College of Trust and Estate Counsel.  He frequently lectures at tax planning courses, including continuing education seminars. He has authored extensive material published by the NBI, Lorman Education Services, Professional Education Seminars, and other national seminar companies, including topics such as “LLCS: Beyond the Basics,” “LLC Business Law Bootcamp,” “LLCs: Advising Small Business Start-Ups and Larger Companies in New Jersey,” “Partnerships, LLCs and LLPs: Organization and Operation,” “Asset Protection Planning in New Jersey,” “Limited Liability Companies in New Jersey,” “Transferring Business Wealth,” “Administration of the Estate in New Jersey,” “Planning Opportunities with Living Trusts in New Jersey,” “New Jersey Probate: Beyond the Basics,” “A Practical Guide to Estate Administration in New Jersey,” and “Family Limited Partnerships and Limited Liability Companies in New Jersey.”

    Elgort received his undergraduate degree with high honors from Rutgers University, his J.D. with honors from Cornell University, and his LL.M. in Taxation from New York University. He is included in the Trusts and Estates section of The Best Lawyers in America© and has been named by his peers as a New Jersey Super Lawyer® in the Tax section.

    About Norris McLaughlin

    At Norris McLaughlin, over thirty business law attorneys spend all or most of their time in a variety of specialties within their field. The range of clients is broad, as are the legal services that the firm provides to them.

    Posted in: Business Law, News, Victor S. Elgort | Tags: ,

  • Oct 15, 2019LLCs From Start to Finish

    Norris McLaughlin, P.A., is pleased to have Victor S. Elgort, Chair of the firm’s Tax Group, speak at the National Business Institute (NBI) two-day seminar, “LLCs From Start to Finish.” Victor will present ” LLC or S-Corp Tax Considerations” and “How to Draft the LLC Operating Agreement” on day one.

    Course Description

    The attendees will be walked through the LLC cycle with practical how-to’s, practice pointers, cautionary advice, and sample forms. Stay up to date with the latest LLC legislation, trends and developments; consider all factors in entity selection and formation, and work through difficult operating agreement provisions. Attendees will also learn more focused skills and applications, such as forming LLCs to purchase real estate, utilizing series LLCs and more.

    Day 1: Legal Update, Entity Selection, Formation, Operating Agreements, and More

    1. New Jersey Legislative Update, Recent Trends, and Developments in LLCs (9:00-10:00 a.m.)
    2. The Revised Uniform Limited Liability Company Act (RULLCA): What You Need to Know (10:15 – 11:00 a.m.)
    3. LLC Nuts and Bolts: Single Member and Series (11:00 a.m. – noon)
    4. LLC or S-Corp Tax Considerations (1:00 – 2:15 p.m.)
    5. How to Draft the LLC Operating Agreement (2:30 – 3:30 p.m.)
    6. LLC Formation and Operation – Process, Procedures, and Pitfalls (3:30 – 4:30 p.m.)

    Day 2: Dividing Member Interests, LLC Conversions, Reorganizations and Disputes

    1. Dividing, Issuing and Transferring LLC Member Interests(9:00 – 9:45 a.m.)
    2. LLC Conversions and Reorganizations (9:45 – 10:30 a.m.)
    3. Using LLCs to Purchase Real Estate 10:45 – 11:45 a.m.)
    4. Using LLCs in Asset Protection and Estate Planning ( 11:45 a.m. – 12:30 p.m.)
    5. Preventing and Handling Disputes in the LLC (1:30 – 2:30 p.m.)
    6. Top LLC Mistakes to Avoid in Everyday Business Practices (2:45 – 3:30 p.m.)
    7. Legal Ethics for the LLC Attorney (3:30 – 4:30 p.m.)

    NJ CLE – 14.4
    NY CLE – 14.0
    PA CLE – 12.0
    CPE for Accountants/NASBA – 14.0

    When: Monday, November 4

    Registration: 8:30 – 9:00 a.m.
    Seminar: 9:00 a.m. – 4:30 p.m.

    Where: Holiday Inn Philadelphia – Cherry Hill

    2175 Marlton Pike W
    Cherry Hill, NJ 08002

    For more information and to register, please click here.

    Posted in: Business Law, Estate Planning & Administration, Events, Health Care & Life Sciences, Taxation, Venture Tech & Emerging Growth Companies, Victor S. Elgort | Tags: ,

  • Dec 07, 2018Victor Elgort to Present on Top LLC Mistakes for National Business Institute

    Victor S. Elgort, a Member of law firm Norris McLaughlin, P.A., will speak at the National Business Institute’s seminar, “Top 8 LLC Mistakes to Avoid in Everyday Business Practices: Avoid, Manage and Leverage Formation, Tax and Operating Agreement Oversights.” The seminar, approved for 8 NJ and NY CLE credits, 6.5 PA CLE credits, 8 CPE credits, and 0.7 IACET credits, will be held Thursday, December 20, 8:20 a.m. – 4:40 p.m., at the Holiday Inn Philadelphia-Cherry Hill in Cherry Hill.

    Elgort will lecture principally on “Taxation of LLCs – Top Attorney Mistakes”, with a focus on operating agreement drafting errors.  For more information or to register, visit the NBI website.

    Elgort often speaks at seminars on structuring complex LLC and partnership transactions. Most recently, on November 27, he spoke on a similar topic for the Nassau County Bar Association in New York, at a meeting jointly sponsored by three sections of the Bar Association, including the Corporation, Taxation, Banking & Securities Law Committees.  The theme was “All-Too-Common Mistakes in LLC Operating Agreements.”

    Elgort is Chair Emeritus of the firm’s Tax Group, practicing out of all three Norris McLaughlin locations, as he is admitted in New Jersey, New York, and Pennsylvania. His practice concentrates on business law and tax planning, including the structuring of partnerships and joint ventures, tax-saving real estate and business exit strategies, executive compensation, and domestic and international estate planning matters.

    Elgort organized and created the first limited liability company in New Jersey.  He authored the standard form operating agreements and other documents for limited liability companies published by Julius Blumberg, Inc., including both the forms for use in New Jersey and the generic forms offered nationwide for limited liability companies.

    In addition, Elgort is a Fellow of the American College of Trust and Estate Counsel.  He frequently lectures at tax planning courses, including continuing education seminars. He has authored extensive material published by the NBI, Lorman Education Services, Professional Education Seminars, and other national seminar companies, including topics such as “LLCS: Beyond the Basics”, “LLC Business Law Bootcamp”, “LLCs: Advising Small Business Start-Ups and Larger Companies in New Jersey”, “Partnerships, LLCs and LLPs: Organization and Operation,” “Asset Protection Planning in New Jersey,” “Limited Liability Companies in New Jersey,” “Transferring Business Wealth,” “Administration of the Estate in New Jersey,” “Planning Opportunities with Living Trusts in New Jersey,” “New Jersey Probate: Beyond the Basics,” “A Practical Guide to Estate Administration in New Jersey,” and “Family Limited Partnerships and Limited Liability Companies in New Jersey.”

    Elgort received his undergraduate degree with high honors from Rutgers University, his J.D. with honors from Cornell University, and his LL.M. in Taxation from New York University. He is included in the Trusts and Estates section of The Best Lawyers in America and has been named by his peers as a New Jersey Super Lawyer in the Tax section.

    Posted in: Business Law, News, Victor S. Elgort | Tags: , , , , , , , , , ,

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