Trusts and Estates

LEADERSHIP: Joan C. Arnold

Complex modern tax and property laws are an obstacle to the efficient transfer of family assets between generations. Indeed, the combination of federal and state income and death taxes can decimate family wealth.

Pepper Hamilton LLP's Tax and Estates Practice Group devotes its experience, energy and creativity to counseling individuals and businesses on protecting family wealth. Our experienced lawyers and legal assistants concentrate exclusively in formulating and implementing creative strategies to transfer resources within, and preserve capital for, the client's family.

As the complexities associated with family wealth transfer have increased, our Tax and Estates Group has expanded its service beyond the traditional "probate" practice. We are, of course, thoroughly familiar with the tax and property laws relating to the planning, administration and litigation of estates and trusts. We also are experienced in issues involving closely held businesses, retirement accounts, insurance, charitable gifts and foundations, valuation and planning for incapacity.


Estate Planning

Estate planning is essential to preserve family wealth. Historically, this consisted of the drafting and execution of a Will. However, today's elaborate tax rules, the wide variety of assets found in the modern portfolio and the prevalence of complicated family situations requires a "holistic" approach to estate planning. The Pepper estate plan will take into account all aspects of a client's wealth, not only property governed by a Will. This includes assets that pass at death by survivorship, by beneficiary designation or through an existing trust to others.

Modern estate planning also requires consideration of a lifetime gift program. We formulate and implement long-term programs aimed at protecting the client's financial security for life while minimizing the tax cost of passing wealth to the next generation. The estate plan is grounded in the client's intentions and expectations for how his or her wealth will be distributed at death. Working with the client, the lawyer will conceive a plan to reduce tax and administrative burdens to a minimum.

Of course, the estate plan must include the drafting of a Will and other related documents that take maximum advantage of the various federal, state and international death tax exemptions. In addition, our Trusts and Estates team fashions personalized plans using one or more available tax reduction techniques. We may recommend the re-titling of assets between spouses. Or we may advise clients to create lifetime trusts, a family limited partnership, a charitable foundation, or other imaginative vehicles that not only reduce taxes, but may also protect beneficiaries against claims by creditors or a divorcing spouse. In each case, Pepper's estate planners use the firm's breadth of knowledge and experience as tools to safeguard a lifetime's accumulation of wealth.

Estate and Trust Administration

A practical approach to estate and trust administration is as important as estate planning to the efficient transfer of family wealth. Pepper estate administration includes considering various tax planning alternatives, including taking advantage of certain tax elections, disclaimers and other "post-mortem" techniques. We counsel executors and trustees on all phases of administration, including representation before courts and taxing authorities as well as counseling on the numerous other aspects of fiduciary law.

Under the supervision of a trusts and estates lawyer, Pepper's highly experienced estate administrators ensure that estate and trust assets are properly accounted for, appraisals are obtained, tax filing requirements are met, and distributions of estate and trust assets made in a correct and timely fashion. We combine state-of-the-art computer technology, decades of experience with the tasks involved and a sensitivity to the emotional and human issues that can arise at this critical time to ease the executor's responsibilities involved in marshaling, liquidating, administering and transferring assets at death.

We help with the proper administration of trusts as well as estates. Trusts serve vital tax and non-tax functions. The Pepper Trusts and Estates team is experienced in all phases of the long-term administration of trust accounts and is capable of taking responsibility for tax planning, preparation and filing, trust and estate accounting, and distributions.

Closely Held Business Planning

Protecting the family wealth represented by a closely held business is a staple of our trusts and estates practice. Indeed, maximizing the value of a client's business for his or her heirs ranks as one of the most satisfying endeavors we undertake.

The need for closely held business planning goes beyond the family business. All business owners should consider whether, under their current plans, their heirs will obtain the same return on the business investment as the owner received during his or her lifetime. Planning for a business consisting of unrelated partners and co-shareholders requires the same level of attention required for clients who wish to pass their business interests to their children.

Our trusts and estates lawyers use creative long-term "business succession plans" to minimize the devastating effect of death taxes over several generations. Such plans may encompass the creation of partnerships, long-term irrevocable trusts and the use of shareholder agreements. In conjunction with Pepper's commercial and tax lawyers, the Trusts and Estates team regularly restructures businesses to place the owners and their families in the most tax advantageous position.

In many cases, an acquisition or the restructure of a closely held business will have estate implications that clients rarely recognize. Our counsel and advice on the long-term implications of non-estate related commercial transactions can be just as crucial as our estate or business succession planning.


Finally, Pepper's Tax and Estates Group has a strong capability in litigating estate and trust issues. This includes representing executors, trustees or beneficiaries in relation to Will contests and document interpretation issues. Our lawyers work with all phases of estate litigation, both at the audit of the fiduciary account and in non-probate courts.

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