The Washington Supreme Court upheld the state's capital gains tax in a 7-2 decision, overturning Douglas County Superior Court’s ruling that the tax is an unconstitutional tax on income.

A primer on the special estate planning considerations for clients who are authors or hold intellectual property rights and service agreements.

A power of attorney for use by an individual residing in Washington to authorize a third party to manage the individual's property and financial matters. This Standard Document has integrated notes and drafting tips.

A Standard Document creating a revocable transfer on death deed (TOD deed or TODD) under Washington law.

A Q&A guide to Washington laws on estate taxation of transfers at death.

On April 25, 2021 the Washington Legislature passed Senate Bill 5096, a state capital gains tax on individual residents of the State of Washington. This update was originally published on April 30, 2021, with the title "Washington’s New 7% Capital Gains Tax Questions Answered."

As high-net-worth taxpayers learn of recent Internal Revenue Service pronouncements, they’re rightfully asking their trusted advisors, “Could the IRS Wealth Squad be coming for me?”

On November 3, 2020, California voters narrowly approved Proposition 19 (The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act) and with it comes significant property tax changes for California real-property owners.

Although the economy has faltered during this COVID-19 pandemic, wealth transfer continues to grow. This article outlines a few of the estate planning techniques to make the best out of these trying times.

With the 2020 elections rapidly approaching, individuals may be considering making contributions to political candidates, campaigns, action committees (PAC), or parties.

At a recent conference, top officials with the Internal Revenue Service announced a renewed audit focus on high-net-worth (HNW) individuals and their related entities going forward.

Taxpayers are required to take minimum annual distributions, commonly referred to as required minimum distributions (RMDs), from their Individual Retirement Accounts (IRAs) and certain other defined contribution plans (e.g., 401(k), profit sharing, and 403(b) plans) beginning April 1 of the calendar year following the year they turn 72 years of age[1].

The Internal Revenue Service (IRS) intends to audit hundreds of high net worth individuals and their related entities starting this month.

The Washington Department of Revenue (DOR) on May 28, 2020, published a Special Notice advising that, beginning June 1, 2020, in determining a decedent’s taxable estate for Washington estate tax purposes, the DOR will treat a business entity holding real property as an intangible asset regardless of whether the business entity served a true business purpose.

Between March 17 and April 9, 2020, the U.S. Department of Treasury and the IRS issued a series of notices automatically extending to July 15 the deadline for the filing of all federal income and gift tax returns and all federal estate tax returns due on or after April 1, payment of all federal income, gift, and generation-skipping transfer (GST) tax in respect of the 2019 taxable year, and payment of all federal estate tax and estimated federal income tax for the 2020 taxable year otherwise due on or after April 1, 2020, and before July 15, 2020.

An important improvement aimed at ensuring a faster, less expensive, and more tailored approach to reorganizations involving smaller businesses was embedded in the recent $2 trillion recovery package known as the Coronavirus Aid, Relief and Economic Security Act (CARES Act).

Prior to 2018, the federal estate and gift tax exclusion amount was $5 million, adjusted annually for inflation. The Tax Cuts and Jobs Act of 2017 temporarily increased the exclusion amount.

The Setting Every Community Up for Retirement Enhancement Act (the SECURE Act) was signed into U.S. law on December 20, 2019.

On June 21, 2019, the U.S. Supreme Court issued its opinion in North Carolina Department of Revenue v. Kimberly Rice Kaestner 1992 Family Trust. This unanimous decision stated that the State of North Carolina may not tax trust income that has not been distributed to the beneficiaries, for which the beneficiaries lack the right to demand the income, and for which the receipt of that income is uncertain simply because those beneficiaries reside in the state.

The Washington Legislature completed its 2019 legislative session with the passage of sweeping changes to the real estate excise tax (REET).

The Tax Cuts and Job Act of 2017 (the Act), was signed into law on Dec. 22, 2017, bringing a myriad of changes to the Internal Revenue Code and sparking a substantial amount of commentary and analysis. While much attention has been centered on the consequences of the Act for individual and business taxpayers, relatively little focus has been given to the impact of the Act on trust and estates.

The IRS recently announced that it would end the Offshore Voluntary Disclosure Program (OVDP).

With the passage of the Tax Cuts and Jobs Act of 2017, attorneys in Perkins Coie’s Trust & Estate Planning practice, along with our clients running closely held businesses, have already begun reviewing and implementing tax-efficient strategies. 

Last week, the Tax Cut and Jobs Act was signed into law and generally takes effect on January 1, 2018. In this update, we summarize some of the most significant tax law changes and suggest steps you might consider taking before the end of 2017 to reduce your income tax liability.

The King County Superior Court held on November 17, 2017, that Seattle’s recently adopted city income tax is illegal under Washington law.

To receive this Quarterly Investment Update by email, request our composite performance history, or request descriptions of the indexes and other information included in this report, please contact us at PCTrust@perkinscoie.com.

The City of Seattle adopted Ordinance 125339 on July 14, 2017, which imposes an income tax on Seattle residents and certain irrevocable trusts.

To receive this Quarterly Investment Update by email, request our composite performance history, or request descriptions of the indexes and other information included in this report, please contact us at PCTrust@perkinscoie.com.

To receive this Quarterly Investment Update by email, request our composite performance history, or request descriptions of the indexes and other information included in this report, please contact us at PCTrust@perkinscoie.com.

To receive this Quarterly Investment Update by email, request our composite performance history, or request descriptions of the indexes and other information included in this report, please contact us at PCTrust@perkinscoie.com.

The election of Donald Trump and Republican majorities in U.S. Congress make the future of the federal transfer tax system (gift, estate and generation-skipping transfer (GST) taxes) uncertain. President-elect Trump and congressional Republicans may seek to repeal or significantly modify those taxes. They have also called for significant income tax reform. These changes would impact personal and family estate planning as well as family offices, businesses and investment companies.

The federal gift tax annual exclusion currently allows each individual to give up to $14,000 each year to an unlimited number of donees – entirely free of tax.

The federal government proposed sweeping new tax rules earlier this month that would dramatically affect family businesses, investment partnerships and other entities.

Washington state approved significant amendments to its Limited Liability Company Act earlier this year that will become effective on January 1, 2016.

Creating an Irrevocable Life Insurance Trust (ILIT) can dramatically increase the liquidity of an individual’s estate and effectively leverage the value of the annual $14,000 per donee gift tax exclusion and the $5,430,000 generation-skipping transfer tax (GSTT) exemption for U.S. persons. (The annual exclusion is $14,000 in 2015.

Family office key employees have new flexibility under recent SEC guidance regarding the nature and range of persons who can properly be involved in the administration of their trusts.

In Washington, a competent adult has the right to control his or her healthcare treatment. Unfortunately, a patient's medical condition may prevent the patient from communicating treatment preferences to a healthcare provider when the time comes to make important healthcare decisions. 

A fundamental requirement of the Act is that a physician may not administer life-ending medication. The Act instead permits the physician to prescribe life-ending medication to be self-administered by the patient, but only upon adherence to strict procedural safeguards.

The first deadline under the City of Seattle’s new Rental Registration and Inspection Ordinance (“Ordinance”) is coming up at the end of this month.  The law is intended to ensure that residential housing meets basic safety and maintenance requirements.  It applies to most rental housing in Seattle; there are various exemptions for commercial lodging, licensed senior housing facilities, hospitals, government housing and other less typical types of housing.

Family offices have existed for over a century and have been formed to implement very important and complex objectives, including investment management, corporate succession, estate, gift and income tax planning, and charitable giving issues that are important to the members of the family.

Over the last several years, the Internal Revenue Service (IRS) has focused its efforts on enforcement of U.S. laws with respect to offshore assets held by U.S. citizens and residents, including their tax payment and reporting obligations.

Welcome to the Family Office Services Group's new update series "Did You Know?"  It is an easy-to-read, timely and brief focus on legal issues and developments facing you and Family Offices throughout the year.  In our first edition of "Did You Know?" we look ahead to the end of the year and the many tax concerns that can arise as the calendar year closes.

As of September 13, 2013, the Arizona Secretary of State is no longer accepting registrations from charities that solicit charitable donations in Arizona. Arizona House Bill 2457 repealed the former Section 44-6552 of the Arizona Revised Statutes.

A private foundation is often the vehicle of choice for donors who want to ensure that their charitable goals are realized. The private foundation is particularly attractive because it allows a donor and members of the donor’s family to be involved in the foundation’s management and administration. The features that make private foundations popular with many donors will be explored in the following Update that provides both a general overview of private foundations, as well as a discussion of their advantages, entity structures, types, special rules, tax deductions, and planning and funding considerations.

Just as the end of the year can be a good time to make charitable donations, it can also be a good time to make political contributions for those who give frequently in federal elections.  The federal campaign finance laws cap the total amount that an individual may give to all federal candidates and committees combined during a two-year period.

This is an alert to our clients regarding fraudulent offers of business filing services.  Scammers are using criminal tactics to solicit information about your corporation, partnership, limited liability company and other business entities by offering to file documents with the secretary of state on your behalf. 

2012 may be the ideal year for Washington residents to make gifts.  The combination of the current Washington State tax laws and the change in the federal transfer tax structure presents a unique opportunity for residents to make large gifts to reduce the impact of the State estate tax.

As indicated in a prior update, on June 22, 2011, the SEC adopted a rule (Rule) defining the term "family office" for purposes of identifying entities eligible for exclusion from registration as an investment adviser under the Investment Advisers Act of 1940 (Advisers Act).  In connection therewith, the staff of the Division of Investment Management (Staff) recently provided responses to select questions regarding the definition of a "family office" under the Rule.  Highlighted below are (i) summaries of the Staff's responses to a few of the more pertinent questions, and (ii) a reminder with respect to a few provisions of the Rule which may cause the unsuspecting family office to inadvertently fall outside of the registration exclusion

The 2011 Offshore Voluntary Disclosure Initiative, which ends August 31, 2011 offers taxpayers who either maintain undisclosed foreign bank accounts or use foreign entities to conceal offshore investments a way to substantially reduce their potential penalties as opposed to those who do not come forward.

At an open meeting of the Securities and Exchange Commission (SEC) on June 23, 2011, the SEC Commissioners approved a new rule defining “family offices.” Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) excluded family offices from the definition of investment adviser under the Investment Advisers Act of 1940 (Advisers Act) and thereby exempted family offices from the registration requirements under the Advisers Act, as amended by the Dodd-Frank Act. However, Section 409 of the Dodd-Frank Act also directed the SEC to adopt a rule defining the term “family office” in order to identify the entities eligible for the exclusion. On June 23, 2011, the SEC adopted such a rule.

You already know how tax-deferred plans benefit your retirement planning, but do you know how to maximize their benefits for your favorite charities?

A lifetime gift to a charitable remainder trust (CRT) can produce impressive tax and nontax results. A gift to a CRT qualifies for current income and gift tax charitable deductions although the charity will not have the beneficial use of the property until the noncharitable interests expire. In the meantime, the donor or other noncharitable beneficiaries will receive payments from the trust. Transferring highly appreciated assets to a CRT is particularly attractive - especially for donors who have some charitable interests.

The federal gift tax annual exclusion currently allows each individual to give up to $13,000 each year to an unlimited number of donees – entirely free of tax. (Under the 1997 Tax Act, the amount of the exclusion is indexed to inflation and is rounded to the next lowest multiple of $1,000.)

Charitable lead trusts (CLTs) offer a tax advantaged way to transfer property to family members after a term during which fixed amounts are payable to one or more charities. CLTs can provide for the payment to charity to be in the form of either a fixed amount (an annuity form of trust) or a fixed percentage of the annually determined value of the assets of the trust (a unitrust). CLTs almost always take the form of an annuity trust (a so-called CLAT), because it generally offers a greater overall benefit.

GRATs are a special type of trust, first authorized by Congress in 1990, that can greatly reduce the tax cost of making gifts. Importantly, recent developments confirm that GRATs can be planned that entirely eliminate gift tax costs. GRATs are particularly attractive because they have essentially no downside risk.

A QPRT is simply an irrevocable trust to which an individual (the "grantor") transfers a personal residence, reserving the right to occupy the residence for a term of a certain number of years. At the end of the term, the trustee of a QPRT either distributes the residence to the designated beneficiaries - usually the grantor's children - or retains the residence in trust for later distribution to the beneficiaries. If the trust continues, the trustee can lease the residence back to the grantor at a market rental rate without causing the residence to be included in the grantor's estate.

On February 3, 2005, the Washington Supreme Court rendered a decision that effectively repealed the Washington estate tax. The legislature and the governor responded by enacting a new State estate tax to address the loss of tax revenue that would otherwise be incurred by the State.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ("2010 Tax Relief Act"), signed into law on December 17, 2010, provides individual and business tax relief that includes a two-year extension of capital gains and dividend income rate reductions, a two-year extension of individual income tax rate reductions and certain other individual and business tax relief.  Additionally, the legislation increases the estate and gift tax exemption level to $5 million and reduces the tax rate to 35 percent through 2012.

On December 18, 2010, President Obama signed the Red Flag Program Clarification Act of 2010.  Effective immediately, the act changes the definition of the word “creditor” in the FTC Red Flags Rule to exclude most professionals that take payment after rendering services.

On October 12, 2010, the Securities and Exchange Commission proposed a new rule, based on requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, defining “family offices” that will be excluded from regulation under the Investment Advisers Act of 1940.