Estate Planning and Carried Interest: Estate Tax Reduction Strategies for Private Equity and Hedge Fund Founders

Strategies for Wealth Transfer and Asset Protection to Avoid Adverse Tax Consequences

A live 90-minute CLE/CPE webinar with interactive Q&A


Tuesday, August 1, 2017 (in 9 days)
1:00pm-2:30pm EDT, 10:00am-11:30am PDT


This CLE/CPE webinar for estate planning counsel who advise—or want to advise—private equity and hedge fund founders will discuss the estate planning opportunities presented by carried interest. The panel will outline how planners can help structure founders’ transfers of carried interest to family members, dive into the particulars of Chapter 14 of the Internal Revenue Code, explore the unintended impact on founders’ estate planning, and discuss multidisciplinary strategies specialists are implementing for these high net worth clients.

Description

Virtually every private equity or hedge fund uses carried interest—a share in the fund’s profits in excess of a minimum return—as part of its economic structure. Because carried interest can appreciate substantially if a fund is successful, it is an ideal asset to plan for using in a variety of estate planning techniques.

Careful planning is required to take advantage of the opportunities that carried interest offers for transferring wealth. IRC Chapter 14 governs the valuation of certain lifetime transfers to family members.

Under a typical private equity or hedge fund structure, a founder’s transfer of carried interest to one or more family members may trigger gift tax consequences under Chapter 14 as well as under traditional gift tax principles. Strategic estate planning can help fund sponsors take advantage of certain transfer techniques to achieve tax savings.

Listen as our experienced panel discusses the estate planning opportunities presented by carried interest. The panel will discuss how a professional team of advisers can work together to provide private equity and hedge fund managers with bespoke carried interest planning techniques that take advantage of wealth transfer opportunities while avoiding unintended adverse tax consequences.

Outline

  1. Overview of private equity and hedge fund structure and estate planning issues
  2. Discussion of IRC Chapter 14 and potential gift tax implications
  3. Unintended impact of carried interest on founders’ estate planning
  4. Strategies for avoiding unintended tax consequences

Benefits

The panel will review these and other key issues:

  • How can proper planning help avoid triggering adverse tax consequences under IRC §2701?
  • Which estate planning techniques are most effective for transferring carried interest?
  • How can a fund founder structure an investment to take advantage of the vertical slice exception?
  • Which “non-vertical” planning ideas should be considered?

Learning Objectives

After completing this course, you will be able to:

  • Determine the investment structure of private equity and hedge funds
  • Identify potential gift tax implications of transferring carried interest to a fund founder’s family member
  • Discern how to strategically transfer carried interest to family members
  • Recognize exceptions available under §2701 to avoid adverse tax consequences of transferring carried interest

Faculty

Marissa Dungey, Partner
Withers Bergman, Greenwich, Conn.

Ms. Dungey's practice focuses on transfer tax planning, estate planning and trust structuring for wealthy individuals and their families. She works with individuals and their advisors to develop and implement sophisticated planning strategies designed to minimize gift, estate and generation-skipping transfer taxes with trust planning optimized to achieve the individual's tax and non-tax goals, including creditor protection, charitable giving and income tax efficiency. She regularly advises on planning with complex assets including interests in hedge funds, private equity funds and family businesses. She also advises on estate and trust administration matters, including adapting existing trusts to improve their tax efficiency and utility.

Kevin Matz, Partner
Stroock & Stroock & Lavan, New York

Mr. Matz concentrates on domestic and international estate and tax planning, estate administration and related litigation. His practice primarily involves advising high net worth individuals with respect to wealth transfer planning; will and trust drafting; gift, estate, income and generation-skipping transfer tax planning and tax return preparation; charitable gift planning; probate proceedings and estate administration; and associated litigation as well as corporate counseling. He has also advised clients on entity and succession planning, including the use of family limited partnerships, the use of grantor retained annuity trusts, transfers to irrevocable trusts involving complex valuation issues, qualified personal residence trusts, irrevocable life insurance trusts, and the use of charitable remainder trusts, charitable lead trusts and private foundations to further both family planning and philanthropic objectives.

Cristine M. Sapers, Partner
Loeb & Loeb, New York

Ms. Sapers focuses her practice on sophisticated estate and tax planning for high-net worth individuals, preparation of wills and trusts and the administration of large trusts and estates. Her area of specialty is working with hedge fund managers and principals of private equity firms on estate planning transfers of interests in their investment funds, including their carried interests. She has substantial experience handling IRS gift and estate tax audits and negotiating and resolving trust and estate disputes. She also counsels donors on charitable giving and advises private foundations and public charities on tax law, nonprofit corporation law and other matters. 

Shishir Khetan, Managing Director
Stout Risius Ross, Houston

Mr. Khetan is a Managing Director in the Valuation Advisory group. He has extensive global experience in corporate finance, valuations and strategic planning. He has advised clients ranging from Fortune 500 companies to medium and small privately held companies, private equity and investment funds, family offices, and accounting, legal and tax advisors. He has over two decades of financial advisory experience covering many industries, resulting in a comprehensive understanding of valuation concepts, capital markets, financial and economic analyses.


Live Webinar

Live Webinar $297.00

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This webinar is eligible for at least 1.5 general CLE credits.

CLE credits are not available for PR.

*In KS, OH, PA, for more than 1 attendee on the connection you must contact Strafford CLE via email or call 1-800-926-7926 ext. 35 prior to the program for special instructions.


CPE on Live Event

Continuing Professional Education credit processing is available for an additional fee per person. You may register for CPE credit processing at any time before or after the program. To qualify for CPE you may not listen via the telephone.

This program is eligible for 1.5 CPE credits.

  • Field of Study: Taxes.
  • Level of Knowledge: Intermediate.
  • Advance Preparation: None.
  • Teaching Method: Seminar/Lecture.
  • Delivery Method: Group-Internet (via computer).
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of verification codes announced throughout the presentation.
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, structuring estate plans, drafting wills and trust documents and supervising other planners/accountants. Specific knowledge and understanding of wills and trust provisions; familiarity with hedge fund structures and carried interest concepts; familiarity with valuation rules.

NOTE: CPE credit processing for all attendees must be ordered by 2pm Eastern the day of the program to receive a Certificate of Attendance within 24 hours.


Recordings

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*Only available for attorneys admitted for more than two years. For OH CLE credits, only programs recorded within the current calendar year are eligible - contact the CLE department for verification.

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Customer Reviews

The seminar was very informative and easy to understand.

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Anderson Hunter Law Firm

I thought the information provided was great.

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The program was well organized and discussed the major issues.

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Estate Planning Advisory Board

Brian M. Annino

Partner

Annino Law Firm

L. Paul Hood, Jr.

Consultant, Speaker and Author

The University of Toledo Foundation

Richard S. Franklin

Member

Franklin Karibjanian & Law

J. Leigh Griffith

Partner and Practice Group Leader - Tax

Waller Lansden Dortch & Davis

Susan M. von Herrmann

Partner

Perkins Coie

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