ON THE COVER: The 1972 aboriginal painting “Water and Bush Tucker Dreaming,” by Johnny Warangkula Tjupurrula was sold this July at Sotheby’s auction house in Australia for $78,145.

Johnny Warangkula Tjupurrula was among Australia’s most successful aboriginal artists; another of his works, “Water Dreaming at Kalipinypa,” set a new record in 1997 when it sold for $210,000 at a Sotheby’s auction.

The artist, who was born around 1920 and died in 2001, created “Water and Bush Tucker Dreaming” at Papunya, in central Australia, in May or June of 1972, according to Sotheby’s. The previous owner, JoAnne Walker of Ruston, La., told the New York Times that she purchased the painting for $30 on a visit to Australia about 30 years ago. —Wendy Davis


12 New Specimens
Conrad Teitell reports: The Internal Revenue Service has issued specimen safe-harbor charitable remainder annuity trust agreements for inter vivos and testamentary trusts.

14 Tax Law Update
From David Handler of Kirkland & Ellis

14 T&E Advisory Board
New additions to the Trusts & Estates advisory board: Stephen Wolff of the Ashton Group to chair the insurance committee, plus a revamped committee on high-net-worth families and family offices.

Estate Planning & Taxation

20 Role Reversal
By Paul Falletta

A growing number of senior citizens are taking advantage of their most valuable asset— home equity—to get money from banks. These arrangements, called reverse mortgages, can provide much needed cash for older homeowners who are willing to overcome psychological resistance to increasing debt in retirement. Reverse mortgages allow seniors to supplement fixed income and compensate for downward-spiraling stocks. When combined with wealth-replacement trusts, reverse mortgages may not decrease the children’s inheritance.

-Paul Falletta is a Camarillo, Calif.-based chartered financial consultant, chartered life underwriter and fellow of the Life Management Institute. He is a member of the Association for Advanced Life Underwriting and the Society of Financial Services Professionals.

28 Unmarried But Protected
By Shari A. Levitan, and Ellen S. Berkowitz

Couples don’t have to be married to own property together, but unwed couples—including gay and lesbian as well as heterosexual unmarrieds—face more hurdles when it comes to disposing of property. The same holds true for siblings as well as parents and children who own propety together. These “unmarrieds” can’t take advantage of the same tax benefits that apply to transfers to spouses and are often left out of the laws governing intestacy, health care and financial decision-making. But the good news is advisors can create tax-efficient plans to meet most of these clients’ objectives.

-Shari A. Levitan is a partner in the Boston office of Holland & Knight LLP, where she practices in the trusts and estates group. She has taught a Suffolk University Law School and at Boston University’s program for financial planners.

-Ellen S. Berkowitz is an associate in the trusts and estates group in the Boston office of Holland & Knight, LLP.

34 Big Dilemna for Family Businesses
By Harold Abrams

Many parents want to leave their small businesses to the children but, often, not all siblings are equally interested in carrying on the family enterprise. How can parents fairly distribute the wealth, while also allowing the interested children to continue in the business? And how can parents preserve sibling harmony, when the brothers and sisters want different things from the family business?

-Harold Abrams is a partner in Kilpatrick Stockton LLP in Atlanta, Ga., where he practices in firm’s the tax and trusts and estates department. He has been chairman and president of the Southern Federal Tax Institute, president of the Atlanta Tax Forum and the Atlanta Estate Planning Council and chairman of the State Bar of Georgia’s tax section.

38 Shelter From the Storm
By Russ Alan Prince and Richard L. Harris

Clients—fearful of lawsuits, divorce and other financial setbacks—want to protect their assets. But many lawyers don’t necessary how to best help them, according to an April survey. Almost three out of four lawyers surveyed say they need to know more about asset protection; fewer than one in five consider themselves authorities on such strategies. Many also worry that asset-protection planning may not be ethical.

-Russ Alan Prince is president of the market research and consulting firm Prince & Associates in Shelton, Conn. He is a consultant to financial institutions and financial advisors on strategic and marketing issues related to the affluent.

-Richard L. Harris is the managing member of BPN Montaigne LLC in Clifton, N.J.

34 Asset-Protection Planning
Ethical? Legal? Obligatory?
By Gideon Rothschild and Daniel S. Rubin

Can a lawyer or financial advisor help a client shield assets? The answer might depend on the likelihood of creditors coming forward. If there are creditors waiting in the wings to collect judgments, shielding assets might land a counselor in hot water. But if creditors are only a theoretical possibility, asset-protection may be as ethical as any other financial planning.

-Gideon Rothschild is a partner with New York City’s Moses & Singer LLP, where he co-chairs the estate planning and wealth preservation group. He is a fellow of the American College of Trust and Estate Counsel and a member of the advisory board of BNA’s Tax Management. He co-authored the BNA Tax Management portfolio on asset-protection planning, and is an adjunct professor at the University of Miami Law School Graduate Program.

-Daniel S. Rubin is a partner with Moses & Singer LLP, where he specializes in estate- and asset-protection planning strategies. He is a frequent lecturer and author on these topics.


46 Planned Gifts Under
The New Tax Law
By Conrad Teitell

The Jobs and Growth Tax Relief Reconciliation Act of 2003 will have a big impact on gifts to charities. Conrad Teitell explains how the new law might affect both outright charitable gifts and split interest charitable gifts.

-Conrad Teitell has been a contributing editor for Trusts & Estates magazine since 1980. An expert on charitable giving, he is a member of Stamford, Conn.-based Cummings & Lockwood, author of the treatise Philanthropy & Taxation and a fellow of The American College of Trust and Estate Counsel. He is a marathon runner, writer and lecturer.

Special Report
The Next Generation

50 Top Law Schools Fail
To Train Students in T&E
By Margery Gordon

The American College of Trust and Estate Counsel has surveyed the academic landscape-and found it wanting. The nation’s law schools have been losing interest in trusts and estates, leaving hopeful T&E lawyers to learn on the job or go back to school for an LL.M.

-Margery Gordon is a freelance writer based in New York City. She previously worked as a reporter for American Lawyer Media.

57 Time to Specialize
In Probate Litigation? By Wendy Davis

Some predict a rise in probate litigation as baby boomers begin fighting over their parents’ estates.

-Wendy Davis is a freelance writer based in New York City. A lawyer, Davis previously worked as a reporter for American Lawyer Media.


60 Reductio Ad Absurdum
By Alvin J. Golden

In the latest manifestation of the Internal Revenue Service’s apparent aversion to trusts, the agency issued three rulings that effectively forbid separate-accounts treatment for trust beneficiaries of qualified retirement benefits. But there are ways around this prohibition, author Alvin Golden notes. So, in effect, the IRS has merely elevated form over substance.

-Alvin J. Golden is a name partner with Austin, Texas’s Ikard & Golden, P.C. He also is a fellow of the American College of Trust and Estate Counsel.

64 Wrap Culture
By Bob Colvin

The Internal Revenue Service takes aim at the lucrative private placement insurance market with new rules requiring hedge funds to meet the same criteria as tightly monitored mutual funds when wrapping products in the insurance arena.

-Bob Colvin is of counsel to Chamberlain, Hrdlicka, White, Williams & Martin in Houston, Texas, where he practices in the international tax and estate-planning and administration departments.