Prince’s Death Presents Dilemma for IRS

When Michael Jackson died in 2009, the superstar’s estate tax attorneys estimated the value of Jackson’s likeness and image at a mere $2,105. The IRS came back with what was most likely a more realistic estimate of Jackson’s image of a whopping $434 million. The difference is worth millions of dollars to Jackson’s estate and to the IRS, who can theoretically tax that asset at 40 percent.Jackson’s tax battle is due to commence in US tax court, in February, 2017.

Prince’s recent death presents similar problems for the IRS and the popstar’s estate tax lawyers.

“This could be very ground-breaking,” said Jonathan Blattmachr of the estate planning advisory group of Pioneer Wealth Partners. The way this is handled by the IRS could change the way big-name celebrities plan their estates, especially with regard to rights to their images.

Despite the several similar examples to learn from, there are still practically no rules to guide the IRS or taxpayers when it comes to taxing the worth of an image, likeness or name.  One solution suggested by Blattmachr would be to exempt the value of names and likenesses from estate taxes and instead tax future earnings from the image as ordinary income, not capital gains.

“Michael Jackson will be different from Prince who will be different from Madonna,” Mr. Blattmachr said. “It’s horribly speculative as to what the value is.”

Making Power of Attorney Decisions

documentDeciding on a power of attorney is not only for the elderly (but that demographic certainly should be making it a priority). Various estate planners work on facilitating this process for their clients. Creating a power of attorney is not really something one can do alone; they are often complex papers, involving a wide range of important decisions.

To help navigate the process, a book has been written on the matter by authors Jonathan Blattmachr and Martin Shenkman. ‘Powers of Attorney: The Essential Guide to Protecting Your Family’s Wealth,’ is an e-book that focuses completely on powers of attorney.

Some of the subjects covered in the book include:

  1. Who to appoint
  2. How many agents should be appointed
  3. Alternates (in an instance in which your agent cannot serve)
  4. Trust Powers
  5. Copies and Storage
  6. Durable (those who survive the incapacity of the principal)/ Springing (when the principal becomes incapacitated)
  7. Gifting

The authors also advise readers to make a preliminary check with all of their financial institutions where they have accounts to check if they have power of attorney forms.


Eagle River Advisors Principals to Hold Webinar on Life Insurance and Estate Planning

Jonathan Blattmachr and Marc Pasquale of Eagle River Advisors will hold a webinar on Wednesday, June 27 at 1 pm EDT. The complimentary webinar is being held in conjunction with InterActive Legal and is entitled “Life Insurance and Estate Tax Planning: Towards a More Objective Decision”.

Life insurance is frequently purchased as a solution to funding estate taxes, but in practice, it may be a costly and imperfect solution. The event affords professionals in the industry an opportunity to hear the speakers discuss their views on how life insurance can be incorporated together with lifetime estate planning solutions including the use of some atypical insurance designs that offer additional efficiency and flexibility. The webinar is being presented in conjunction with an article authored by Mr. Blattmachr and Mr. Pasquale that is being published in an upcoming issue of Trusts and Estates.

Eagle River Advisors is an independent boutique advisory firm which develops and delivers innovative wealth, gift and estate planning strategies on behalf of high net worth individuals and families. Established in 2010 by three highly respected and renowned industry luminaries, Eagle River Advisors’ approach is unique for the superior pedigree of its counsel and for its focus on creating individualized client solutions that fully address current legal, economic and regulatory environments.

Jonathan Blattmachr Speaks at 46th Annual Heckerling Institute on Estate Planning

At the 46th Annual Heckerling Institute on Estate Planning in Orlando, Florida, expert trust and estate planning attorney Jonathan Blattmachr of Eagle River Advisors opened the event with a presentation on the need to build flexibility into estate plans during these uncertain times.

Mr. Blattmachr, a luminary in the estate planning field, prolific speaker and author of numerous articles, books and studies, spoke about the fundamentals and fine points of powers of appointment, highlighting how powers can produce enhanced estate, gift, generation-skipping transfer tax and income tax benefits as well as how they can also cause adverse effects. The presentation was designated a “Fundamentals Program,” specifically designed to provide essential background that subsequent speakers built upon, including presentations on IRA distributions and rollovers, using the new $5 million exclusion and the generation-skipping transfer tax matters.

The event at the Orlando World Center Marriott Resort and Convention Center from January 9 – 13, was well-attended by fellow members of the industry looking to acquire the strategic edge Mr. Blattmachr and the Institute faculty have built a reputation for providing over the decades.

Based in New York, Mr. Blattmachr is a principal of Eagle River Advisors, a boutique advisory firm dedicated to developing and implementing innovative wealth planning strategies on behalf of high net worth individuals and families. Eagle River’s team has focused on the planning needs of the high net worth community since the 1980s. Over the past decade, Eagle River principals have worked on numerous multi- million dollar transactions together including multiple transactions with Forbes 400 families.

Jonathan Blattmachr at the 2011 Federal Tax Clinic

Preeminent trust and estate planning lawyer Jonathan Blattmachr of Eagle River Advisors today will be delivering a speech on temporary estate, gift and GST tax exemptions to the 2011 Federal Tax Clinic at the Bryant Conference Center on the campus of The University of Alabama. The conference, in its 65th year, brings together tax professionals for a two day event to discuss key industry topics and changes.

The Alabama Federal Tax Clinic, founded in 1947, provides quality educational service to CPAs and tax lawyers in the Southeast. With unique expertise and feedback from Clinic participants, the board has maintained the clinic for over 60 years. This year’s seminars feature leaders in the fields of estate planning developments, international tax and partnership sales, among others.

Mr. Blattmachr’s speech, entitled the ‘Impact of $5 Million Exclusion,’ will tap into his deep knowledge of the ever-changing tax codes, and offer his insights into best estate planning strategies for a plethora of individual circumstances. Participants will benefit from his expertise, stemming from 35 years of experience in trusts and estates law, his extensive lecturing on estate and trust taxation and charitable giving, and his authoring or co-authoring of five books and over 400 articles on estate planning topics.

Specifically, Jonathan Blattmachr will cover the opportunities for financial and estate planning available under the temporary $5 million estate, gift and GST tax exemptions. He will explain how most efficiently to use the exemptions, including how to have the transfer or retain interests in the property transferred while keeping the property out of his or her estate for Federal tax purposes. Further, he will discuss how to avoid the reciprocal trust doctrine if spouses create trusts for each other and the role of life insurance in such planning.