FY 2011 Budget, Policy and Taxation Group

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Investment Solicitations Policy

Since we receive numerous requests every day to consider investing for our clients, we have developed a submission policy that is outlined below.

Send a brief write up of the investment opportunity with any significant material to our office for review with an indication on the envelope that it is an investment solicitation. If upon review we determine that we would like to meet to discuss or get further information, we will contact you by email or phone. Do not send blind emails or call, as it is impossible for us to respond to all requests. If you are going to be in our area and you would like an opportunity to meet us in person, please send an email with a “REQUEST TO MEET” in the subject line and we will respond if we are interested and available to meet.

Listen to what the public is saying about estate taxes.

FY 2011 Budget

Today the Administration released its FY 2011 Budget, which includes three proposals aimed to increase estate-related taxes by $23.73 billion over the next ten years. Last year Policy and Taxation Group was successful in working to prevent these tax increases from being included in any legislation moving forward. Specifically, the Treasury Department’s Greenbook had encouraged Congress to partially offset the cost of health care reform with the tax increases, and we strategically engaged our allies on the Hill to prevent that from happening. Here’s a quick summary of the Administration’s proposals:

Limitations on Valuation Discounts: The Administration seeks to empower the Treasury Department to promulgate regulations severely limiting or fully eliminating valuation discounts for families, which would cause assets to be valued at more than they are worth, drastically increasing many families’ estate tax liabilities. The provision is expected to raise $18.67 billion over ten years (last year was expected to raise $24.16 billion).

Restrictions on GRATS: Similar to last year, the Administration seeks to increase the minimum term on Grantor Retained Annuity Trusts (GRATs), increasing the likelihood of death during the term and greatly reducing the ability of families to effectively use the well-established planning tool. The new provision would also require that the value of the remainder at creation be greater than zero and the annuity not decrease during the term. The provision is expected to raise $2.96 billion over ten years (last year was expected to raise $3.25 billion).

Increased Reporting Requirements for Small Family Businesses: The Administration also seeks to create a “consistency” requirement to ensure individuals could not report a higher basis when paying capital gains taxes than that which was applied upon receipt of a gift or death of a decedent. The provision is expected to raise $2.1 billion (last year was expected to raise $1.87 billion).

Our work is more important now than ever as we face both opportunities for estate tax relief in a quickly changing political climate and significant challenges of “Trojan horse” tax increases through changes to valuation and well-established planning tools. We are continuing to strategically focus on both our offensive and defensive efforts to maximize return and minimize risk for our families.

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