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Transfer Planning with Interests in Private Equity and Hedge Funds

Transfer Planning with Interests in Private Equity and Hedge Funds

July 16, 2012

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

Much has been written about the potentially unique opportunities available to people to make gifts before year-end (for example, see our prior posts here and here). If Congress does not act, the increased $5,120,000 gift tax exemption will decrease dramatically. However, if you are the owner of an interest in a private equity or hedge fund, planning to gift part or all your interest in such fund requires particular care and attention.

Private equity funds are usually created as limited partnerships with two classes of owners. The limited partners are the investors in the fund, while the general partner is typically a business entity created as a limited liability company (“LLC”). A carried interest is normally held in and allocated to the LLC/general partner. A carried interest is the right to receive some of the profits of the fund. The initial value of a carried interest is

Planning for Same-Sex Couples

Planning for Same-Sex Couples

March 22, 2012

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

Same-sex marriage is currently permitted in Connecticut, Iowa, Massachusetts, New Hampshire, New York, Vermont, Washington, D.C. and Washington. The individuals who marry in these states have the ability to enjoy state level rights based on their marital status. Rights granted under state law to married couples who divorce are available to same-sex couples who marry. Examples of such rights include spousal maintenance or alimony and equitable distribution of marital property. Similarly, rights granted under state law to married couples upon the death of one of the parties are also available to same-sex couples who marry. Examples of such rights include rights regarding intestate succession (the distribution of a decedent’s property when he or she dies without leaving a valid Will), the right to receive an elective share (many states require

Methods of Giving

Methods of Giving

November 16, 2011

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

As we approach Thanksgiving and the holiday season many of us turn our thoughts to gift giving to family and loved ones. The Federal gift tax system allows us some opportunities to do such “gifting” in a tax free manner. A few states impose independent state gift taxes, so an expert in your state should be consulted before considering any of these gifting transactions. Each individual has a total of $5,000,000 he can give away during his lifetime before owing any gift tax. However, there are several gifting opportunities which do not count as part of your $5,000,000 lifetime total. It is as if the Federal tax law has deemed them non gifts. Present interest gifts of $13,000 in 2011 and 2012 to any number of recipients are not subject to gift

Lessons from 9/11

Lessons from 9/11

September 1, 2011

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

We are rapidly approaching the tenth anniversary of the September 11th tragedy. There is much to be learned from an estate planning perspective in the aftermath.  

Many of those who perished died without having executed a Last Will and Testament. If you die without a Will, the state in which you are domiciled at the time of your death will determine under the laws of intestacy where the property you held in your own name will pass. It takes many people by surprise, but the list of intestate takers or heirs may not be the people you want to inherit and they might not take in the percentages or shares you would want.

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