Article on Estate Planning for Private Equity & Hedge Fund Managers

Nathan R. Brown recently published an Article entitled, Securities Law Considerations When Planning for Private Equity and Hedge Fund Managers, 30 Prob. & Prop., no. 5, 60 (2016). Provided below is a summary of the Article:

The explosive growth in the private equity and hedge fund (“fund”) industry over the past 20 years has created a wealthy class of individuals (that is, fund managers) with unique planning needs arising from the complex structure and economics of the funds they create and manage. As estate planners, we are well-versed in the transfer tax laws; however, we are rarely required to delve into the unfamiliar world of securities laws. To effectively plan for a fund manager, however, an understanding of such securities laws is crucial.

This article is intended to introduce the estate planner to some basic provisions of the securities laws applicable to the ownership of fund interests by irrevocable trusts created by a fund manager, with a particular focus on the qualification of such trusts as “accredited investors” and “qualified purchasers.” When planning for a fund manager, however, it is imperative that the securities laws be thoroughly analyzed.