Wealth Transfer Strategies

Minimizing Tax Liabilities

Clients often seek our counsel to help minimize gift taxes (for lifetime transfers), estate taxes (for transfers at death), and generation-skipping transfer (GST) taxes (for transfers to grandchildren or more remote descendants). Depending on individual circumstances, a client may obtain substantial benefits by making simple lifetime transfers that are excluded from gift taxes, such as annual exclusion gifts, direct payments for tuition or medical care, or gifts to a spouse or charity.

Many of our clients also benefit from more sophisticated planning that utilizes their lifetime gift exclusion. This can include larger direct gifts to irrevocable trusts or leveraged gifting opportunities such as transfers to grantor retained annuity trusts (GRATs) or qualified personal residence trusts (QPRTs); sale transactions with intentionally defective grantor trusts (IDGTs); the use of family limited partnerships (LPs) and limited liability companies (LLCs) as family investment vehicles that allow for creditor protection and centralized management of family assets; and private annuities and self-canceling installment notes (SCINs) to “freeze” asset values.

Our group has extensive experience with each of these techniques. We were at the forefront of planning with family LPs and LLCs, and structuring growth and voting interests to realize wealth transfer goals while being mindful of the client’s comfort level with giving up control. We also frequently work with clients to transfer venture capital interests, including private equity and carried interests.

Planning for the Future

Many of these planning opportunities are coordinated with long-term, multi-generation dynasty trusts. A dynasty trust may be designed to protect family wealth for multiple generations of family members. We work with clients to understand their long-term goals and characteristics, in order to ensure that the trust addresses their wishes regarding support for a spouse or the needs of their children. We help them establish trusts that address their concerns and objectives regarding:

• Flexibility to alter trust terms or consolidate trusts to accommodate each generation’s different needs or respond to future developments in the law.
• Creditor protection
• Incentivizing certain behavior or fostering entrepreneurship or education
• Providing beneficiaries with liberal or restricted access to trust property
• Appropriate mechanisms for trustee succession

Resolving Tax Controversies

Attorneys in our Private Client, Trusts and Estates Group represent individuals and fiduciaries in disputes with the Internal Revenue Service concerning federal estate, gift and generation-skipping tax, individual fiduciary and income tax, and taxation of family business entities. We have an enviable track record in privately and favorably resolving tax controversies for taxpayer clients.

We regularly address a broad spectrum of tax issues, including:

• Closely held operating businesses valuation
• Investment limited partnership and LLC valuation, including valuation discounts
• Artworks and other unique personal property valuation
• Validity of two-life grantor retained annuity trusts (participating in the only case resulting in a taxpayer victory with this technique)
• Validity of preferred interest freezes in closely held entities
• Exclusion of assets from taxable estate, including insurance, trusts, and controlled family businesses

Awards & Honors

• Chambers High Net Worth
  • Private Wealth, National and Illinois (2016-2022); New York (2022)
• Chambers USA
  • Wealth Management, Nationwide (2011-2016)
• U.S. News – Best Lawyers® “Best Law Firms” – National Tier 1
  • Trusts & Estates Law (2014-2022)
• U.S. News – Best Lawyers® “Best Law Firms” – Metropolitan Tier 1
  • Closely Held Companies and Family Businesses Law, Chicago (2020-2022)
  • Trusts & Estates Law, Chicago (2012-2022)
  • Litigation - Trusts & Estates, Chicago (2013-2022)