Juan C. Antúnez on his Florida Probate & Trust Litigation Blog writes about the issue of whether a faith-based arbitration clause can disqualify a trust for tax purposes. His article begins as follows:
We aren’t doing our jobs as estate planners if we don’t anticipate — and plan accordingly for — the structural limitations inherent to an overworked and underfunded state court system that asks our judges to juggle thousands of cases at a time. (In Miami-Dade – on average – each of our probate judges took on 2,848 new cases in FY 2012-13, and in Broward the figure was even higher at 3,105/judge). As I’ve previously written here, one important aspect of that kind of planning should be “privatizing” inheritance disputes to the maximum extent possible by including mandatory arbitration clauses in all our wills and trusts. But can this kind of planning back fire from a tax-planning perspective? That question was front and center in a recently published Tax Court memorandum opinion.
The case discussed is Mikel v. Comm’r, T.C. Memo. 2015-64, 2015 WL 1518063 (U.S.Tax Ct. April 6, 2015).
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.