CLE on Formula Clauses

The ABA Section of Real Property, Trust & Estate Law is sponsoring a 90-minute teleconference on November 16 entitled Using Formula Clauses for Sales and Gifts. The program information is below:

Transferring business interests and other difficult-to-value assets can be fraught with peril for taxpayers and their advisors. The IRS can assert a large gift where none was intended or where a smaller gift was intended. GRATs avoid these issues, but they are not always the most appropriate vehicle. Using a defined value formula clause can mitigate risks when a GRAT does not satisfy the client’s objectives. Although the IRS rarely questions formula clauses in testamentary estate plans, it has challenged them for gifts and sales.

Our panelists will discuss:

• Transfers in which defined value formulas might be considered.
• What has happened when the IRS has attacked them (described by a lawyer who has won the most recent high-profile cases in this area).
• How to structure where the excess goes if the IRS adjusts the value beyond what was thought to be correct. A charity is often the best donee to receive any excess value.

Learn the benefits of including a charity – and the process this entails – on March 1, 2011, when one of our panelists walks through the process with charities who have experience receiving such gifts.