Estate Planning for Qualified Opportunity Zone Fund Investments

Recording of a 90-minute CLE/CPE video webinar with Q&A

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Conducted on Thursday, April 21, 2022

Recorded event now available

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Course Materials

This CLE/CPE course will provide estate planners and advisers guidance on key challenges and planning considerations when incorporating private equity and qualified opportunity zone investments in estate planning. The panel will discuss the impact of private equity and qualified opportunity zone investments on estate planning, outline key tax regulations impacting estates, and explore effective transaction structures and planning techniques to manage both tax and non-tax issues.

Description

If properly structured, investors in Qualified Opportunity Zone Funds (“QOZ Funds”) have tremendous planning opportunities for their interests. But significant nuances are presented, as the ordinary rules that apply to gifts of interests in partnerships, LLCs and other entities do not apply to transfers of interests in QOZ Funds unless the transfer is to a grantor trust. In addition, because the deferred gain amount that is invested in a QOZ Fund constitutes “income in respect of a decedent” upon the investor’s death, there is no step-up in basis upon death for QOZ Fund interests, which means that ordinary estate planning techniques need to be modified to take into account the need to fund a deferred tax liability that will become due following the investor’s death by no later than December 31, 2026.

This program will address the rules that trusts and estates counsel, and other estate planning and financial advisors, need to know in implementing a plan that involves investments in QOZ Funds. Special attention will be paid to the practical application of these rules, including state specific decoupling considerations, and what estate and financial planners need to know about these specialized rules. The panel will also address how investments in QOZ Funds may fit within the panoply of estate planning techniques that are commonly employed to facilitate the transfer of wealth, such as GRATs and installment sales to grantor trusts, and carried interest planning considerations where representing the fund manager that is sponsoring the QOZ Fund.

Listen as our experienced panel discusses estate planning challenges for qualified opportunity zone fund investments. The panel will discuss planning techniques that take advantage of wealth transfer opportunities while avoiding unintended adverse tax consequences.

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Outline

  1. Applicable income, estate, and gift tax rules and issues, including income in respect of a decedent upon death ("IRD")
  2. Use of grantor trusts and other applicable estate planning techniques including GRATs, and planning for no step-up in basis upon death due to IRD
  3. Valuation issues and special rules
  4. Best practices and other challenges for estate planners

Benefits

The panel will review these and other key issues:

  • What are the income, estate, and gift tax ramifications of investing in QOZ Funds?
  • What are the available planning techniques for QOZ Fund investors and fund managers?
  • How can GRATs and defective grantor trusts, among other estate planning techniques, be utilized to minimize taxes, and what are the challenges?
  • What are the valuation issues and their impact on overall planning?

Faculty

Lipoff, Lawrence
Lawrence M. Lipoff, CPA, TEP, CEBS

Director
CohnReznick

With more than 30 years of experience, Mr. Lipoff specializes in the delivery of domestic and international private...  |  Read More

Matz, Kevin
Kevin Matz, Esq., CPA, LL.M. (Taxation)

Partner
ArentFox Schiff

Mr. Matz concentrates on domestic and international estate and tax planning, estate administration and related...  |  Read More

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Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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