Estate Planning, Trusts & Probate

• Represented the corporate trustee in connection with obtaining private letter rulings from the IRS that substantial reformations and modifications to three pre-1985 irrevocable trusts would not subject the trusts to the generation-skipping transfer tax or to the gift tax.
• Represented one of two estate beneficiaries in litigation against the estate’s personal representative over disputes relating to the amount of the personal representative’s compensation and to his breaches of fiduciary duty for misrepresentations in the personal representative’s accounting and for violations of the Uniform Prudent Investor Act. At mediation, recovered a sum of over six figures from the personal representative, individually, for the estate’s beneficiaries.
• Drafted a spousal lifetime access trust as the recipient of a spouse’s separate property interest in large New Mexico Ranch to freeze the value of the gifted property at a substantial discount for lack of control and lack of marketability. Also prepared the associated gift tax return.
• Negotiated, on behalf of one of the part owners, a buy-sell agreement for a corporation owning two multi-million dollar ranches in northern New Mexico and commercial properties in Rio Rancho, New Mexico. The agreement restricted transferability of interests in the ranch to preserve its historic heritage and to keep the ranch in the family. The agreement also was designed to protect shareholders from the creditors of other shareholders from gaining an interest in the entity. The plan included irrevocable life insurance trusts and coordinated estate planning among the various family members. Also advised the client as to additional planning opportunities for reducing exposure to the estate and generation-skipping transfer taxes separate from his siblings.
• Designed Buy-Sell Agreement funded with life insurance to provide a smooth succession plan for non-related owners of a high technology military contractor.
• Drafted multi-generational estate plan for a fifth generation central New Mexico ranching family, designed to preserve the integrity of the ranch for the benefit the family members who remained ranchers, yet also provide for family members who choose other paths.
• Designed estate plan for owners of a western New Mexico ranch who wished to benefit charity, which established various charitable remainder trusts and other tax-exempt trusts, all of which eventually pour into a perpetual charitable trust at the end.
• Established an irrevocable trust for an investor in a high technology start up that has the potential for explosive growth in value. The trust’s purpose was to transfer much of the client’s ownership interest in the start-up into a generation-skipping trust in a transfer tax-free manner before the value is realized.
• Assisted a physician and wife to rearrange their affairs through a separate property agreement to isolate the couple’s vulnerable assets from exposure to questionable malpractice claims in the future.
• Advised the owners of a multiple generation, family-owned chile, onion and pecan farming operation in the central Rio Grande Valley with a $25 million value on asset protection and business succession planning.
• Drafted multi-generational estate planning documents for a great-grandmother with a net worth of $7 million and her daughter, the grandmother, with a net worth of $40 million. The plan maximized both generations’ exemptions from the estate tax and the generation-skipping transfer tax to establish dynasty trusts for the family. The great grandmother’s plan also took into consideration that a portion of her estate would go to Mexican citizens and residents where there is no estate tax, thus preserving exemptions for the U.S. side of the family.
• Drafted a postmortem Qualified Domestic Trust (“QDOT trust”) on behalf of a widowed Mexican citizen residing in the U.S. to preserve the marital deduction in her husband’s estate and defer in excess of 1 million dollars in estate taxes that would have otherwise been due in her husband’s estate. (The marital deduction is not available for gifts to non-U.S. citizen spouses unless the gift is placed in a QDOT trust.)
• Designed an estate plan for $100 million-plus net worth Mexican citizens and residents with U.S. property and children who are U.S. citizens. The plan establishes a dynasty trust exempt from estate taxes for the whole of the estate and a contingent provision applying traditional estate tax planning techniques in the event one or both clients decide to become a U.S. resident at some point in the future.
• Established a rolling two-year Grantor Retained Annuity Trust for $70 million net worth clients to transfer significant values of U.S. stock to children with no gift tax consequences.
• Restated 17-year-old, irrevocable life insurance trust holding $7 million life insurance policy, preserving the generation-skipping transfer exemptions applied to the trust by utilizing regulations applicable to grandfathered GST trusts.
• Established irrevocable trust to hold $1 million gift to ensure special needs treatment and prevent disqualification from government benefits for the beneficiary who is dependent on benefits for healthcare.
• Established revocable living trust for married clients with a taxable estate, the bulk of which was in the form of individual retirement and other qualified accounts, by providing for post-death and estate tax qualified adjustments to the plan to minimize the income tax consequences associated with qualified accounts.
• Assisted an elderly client to plan for his incapacity and the competing interests of his children by transferring control of his revocable and irrevocable trusts, which held family owned pecan farming related businesses and significant liquid assets, from himself to an independent corporate trustee.
• Regularly prepares living trusts and related documents for clients to maximize estate tax and generation-skipping transfer tax exemptions and to provide creditor protection for children of clients. Living trusts also typically include special needs provisions for the surviving spouse and children that “turn on” only when needed. Clients for this type of planning typically range in net worth from $1.5 million to $10 million and up.
• Regularly prepares living trusts designed to provide asset management in the event of incapacity and creditor protection for surviving spouses, especially in the context of long-term care issues. These trusts make extensive use of special needs provisions that “turn on” only when needed. Clients for this type of planning typically range in net worth from $500,000 and up.
• Successfully represented the Trust Protector of an Irrevocable Special Needs Trust in a Declaratory Judgment Action seeking to enforce the Trust Protector’s power of removal against a Trustee who refused to recognize the power. The Trustee, in the Trust Protector’s opinion, began to abuse her fiduciary position to garner control over the special needs beneficiary. The Trustee also had an inherent conflict of interest because she also was a remainder beneficiary of the trust.
• Successfully represented the beneficiaries of an older will in a will contest involving what appeared to be a forged will. The court denied the probate of the newer will that would have disinherited the clients and, instead, probated the older will.
• Served as a testifying expert witness in a malpractice claim involving the administration of a probate estate on behalf of a local attorney. The plaintiff alleged the attorney had violated the ethical rules regarding conflicts of interest and had made mistakes in the administration of the estate. The jury ruled in favor of the attorney.
• Advised the Corporate Trustee of a multi-million dollar, court-created trust for a minor with respect to discretionary distributions, annual accountings, and trustee compensation issues, among other issues. Represented the Trustee in court hearings in which the Probate Judge questioned the Trustee’s discretionary distributions, compensation, and expenses.
• Negotiated, on behalf of the successor Corporate Trustee, the release and indemnity agreement demanded by the prior individual Trustee in connection with that Trustee’s resignation.
• Advised the majority Co-Trustees of an irrevocable trust holding and operating the family pecan farm in responding to a disputing Co-Trustee’s demands and threatened litigation about the interpretation of the trust’s management and dispositive provisions. As a result of the response, the threatened litigation never surfaced.
• Advised the public accounting firm preparing a federal Estate Tax Return regarding the proper allocation of the charitable deduction and estate taxes among competing beneficiaries of a Marital Deduction and Bypass Trust and with respect to claims of breaches of fiduciary duty and conversion against the accounting firm and the Executor.
• Regularly represents the Executor (in Texas) or the Personal Representative (in New Mexico) in the probate and administration of decedents’ estates. Also advises the successor Trustees of Revocable Trusts in the administration of revocable trusts on behalf of incapacitated grantors and after the grantor’s death in the distribution of the estate to beneficiaries or constituent trusts established by the trust agreement in question.