A Qualified Personal Residence Trust (QPRT) allows a homeowner to transfer their personal residence to a trust for a specified period of time, after which the residence is transferred back to the homeowner or to a designated beneficiary. QPRTs are often used as a tax-saving strategy for homeowners who want to reduce the value of their estate for estate tax purposes.

One of the main benefits of a QPRT is the ability to remove the value of a personal residence from the homeowner’s estate. By transferring the residence to a trust for a specified period of time, the homeowner is able to reduce the value of their estate and, as a result, reduce the amount of estate taxes that will be due upon their death.

Another benefit of a QPRT is the ability to maintain the use of the residence during the term of the trust. The homeowner can continue to live in the residence and pay a reduced rent to the trust for the use of the residence. This allows the homeowner to continue to enjoy the residence while also reducing the value of their estate.  QPRTs are subject to certain rules and limitations, such as a requirement that the term of the trust cannot exceed the life expectancy of the homeowner and that the fair market rent must be paid to the trust for the use of the residence.

Overall, a QPRT can be a useful tool for homeowners looking to reduce the value of their estate for estate tax purposes while also maintaining the use of their personal residence.

An Irrevocable Life Insurance Trust (ILIT) is a special kind of trust that is designed to own life insurance. The key characteristic of an ILIT is that it is irrevocable, meaning that it cannot be changed or dissolved once it is created. This characteristic is important because it allows the trust assets to be removed from the estate of the person who creates it, which can help to reduce estate taxes.

An ILIT requires at least one trustee to manage the trust and a beneficiary to receive the proceeds of the life insurance policy. The person who creates the trust, known as the grantor, will typically transfer a life insurance policy into the trust and pay the premiums on the policy. The beneficiary of the trust is typically the family of the grantor.

One of the main benefits of an ILIT is that the proceeds from the life insurance policy are not subject to estate taxes. This can help to reduce the overall tax burden on one’s estate and ensure that more of the assets are passed on to one’s intended beneficiaries.

Another benefit of an ILIT is that it can provide a source of liquidity for one’s estate. The proceeds from the life insurance policy can be used to pay any outstanding debts, taxes, or other expenses that may arise after the grantor’s death.

In order for an ILIT to be effective, it is important that the grantor does not retain any incidents of ownership over the life insurance policy. This includes foregoing the rights to change the beneficiary, borrow against the policy, or cancel the policy. If the grantor retains any of these rights, the life insurance policy will be considered part of the grantor’s estate and subject to estate taxes.

In summary, an ILIT is a type of trust that is used to hold a life insurance policy and can help to reduce estate taxes by removing the policy from the grantor’s estate. It requires a trustee to manage the trust and a beneficiary to receive the proceeds of the life insurance policy, and it can provide a source of liquidity for the estate. It is important to keep in mind that the grantor should not retain any incidents of ownership over the life insurance policy for the ILIT to be effective.

The Spousal Lifetime Access Trust (SLAT) is a type of irrevocable trust that allows married couples to transfer assets to their spouse and other family members while removing those assets from their combined estates. This type of trust can help high net worth individuals take advantage of the federal lifetime gift and estate tax exclusion, which is currently $12.92 million per person in 2023, or $25.84 million per married couple, while still retaining limited access to the assets, if needed.

A SLAT is created by one spouse (the “donor” spouse) gifting property to an irrevocable trust for the benefit of the other spouse (the “non-donor” spouse). The non-donor spouse is the primary beneficiary of the trust and can request distributions from the trustee, if needed, during their lifetime. However, most advisors recommend that the non-donor spouse not request distributions from the SLAT unless it is absolutely necessary to maintain their accustomed standard of living.

The donor’s transfer of assets to the SLAT is considered a taxable gift, but gift tax may not be owed if the donor utilizes their Federal gift and estate tax exclusion. The assets and any future appreciation is removed from the donor’s taxable estate and the trust is excluded from the non-donor’s taxable estate as well.

A SLAT can offer many benefits such as:

• Allows married couples to reduce the size of their estate while retaining limited access to the assets.
• Allows the donor to indirectly benefit from the property gifted to the trust, as long as the non-donor spouse is living and remains married to the donor.
• The non-donor spouse can request distributions from the trustee of the trust to maintain their accustomed standard of living.
• Appreciation of the assets outside the donor’s estate for the benefit of their descendants.

SLATs are a sophisticated estate planning tool and should be created with the assistance of a qualified attorney. They can provide significant benefits to married couples looking to transfer wealth to the next generation while still retaining access to the assets.

Newsletter Article Highlights:

• IRS Postpones $600 Payment Processor 1099-K Reporting Requirement
• How Do Wisconsin’s New LLC Laws Impact My Company?
• Legal Planning for your College Student
• Religious Accommodation in Employment Will Have Its Day at the High Court

Firm News:

• Super Lawyers Recognizes 25 O’Neil Cannon Attorneys
• Grant Killoran Joins the Board of Directors of Milwaukee Film, Inc.
• Attorney Seth Dizard Recently Featured in Super Lawyers
• O’Neil Cannon Ranked in 2023 “Best Law Firms”

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Grant Killoran of O’Neil Cannon was recently elected to serve on the Board of Directors of Milwaukee Film, Inc.

Milwaukee Film is a nonprofit arts organization dedicated to entertaining, educating, and engaging the community through cinematic experiences, with a vision to make Milwaukee a center for film culture. It operates the Oriental Theatre, a historic cinema palace committed to high-quality and accessible film and education programming. Since 2009, its annual Milwaukee Film Festival has brought together film fans and filmmakers to celebrate the power of cinema. Its education programs and cultures and communities platform provide avenues toward making the Greater Milwaukee community a more empathic and equitable place for everyone to live.

Grant is a shareholder with O’Neil Cannon and past chair of the firm’s Litigation Practice Group. He has diverse business dispute resolution and trial experience, focusing on complex business and health care disputes.

Attorney Seth Dizard, chair of O’Neil Cannon’s banking, receivership, and creditors’ rights practice group, was recently featured in the Super Lawyers article “Debt Collection Options for Businesses”. In the article, Dizard shares advice and insights for business owners in the area of creditors’ rights. Read the full article here.

As the head of the firm’s Banking, Receivership, and Creditors’ Rights Practice Group, Dizard regularly serves as a court-appointed receiver throughout the State of Wisconsin for businesses, construction projects, real estate developments, marital and family estates, rental income properties, and high net worth individuals. He also represents financial institutions, secured and unsecured corporate or individual creditors, companies seeking to acquire distressed businesses, and financially troubled corporations in both state and federal courts. In addition, he assists business owners by guiding them through the process of informal financial work-outs and refinancing. Dizard has extensive experience serving as court-appointed receiver, and representing court-appointed receivers, throughout the state in assignments for the benefit of creditors (Chapter 128 Receiverships), as well as real estate foreclosures, the winding-up of closely held corporations, and complex post-judgment collection matters.

Each year, Super Lawyers surveys the State of Wisconsin’s 15,000 attorneys and judges, seeking the State’s top attorneys. Recently, Super Lawyers published its lists for 2022, which include the Top 10 Attorneys in Wisconsin, Top 50 Attorneys in Wisconsin, Top 25 Attorneys in Milwaukee, Super Lawyers (consisting of the top 5% of attorneys in Wisconsin), and Rising Stars (consisting of attorneys who are 40 years old or younger or who have been in practice for 10 years or less).

Twenty-five of our attorneys were recognized by Super Lawyers, which has referred to the firm as “the Milwaukee mid-sized powerhouse.” Those attorneys are the following:

• Nicholas G. Chmurski:
  • Rising Stars
• Douglas P. Dehler:
  • Super Lawyer

• James G. DeJong:
  • Super Lawyer

• Seth E. Dizard:
  • Top 50 Attorneys in Wisconsin
  • Top 25 Attorneys in Milwaukee
  • Super Lawyer

• Peter J. Faust:
  • Super Lawyer

• John G. Gehringer:
  • Super Lawyer

• Joseph E. Gumina:
  • Super Lawyer

• Jessica K. Haskell:
  • Rising Stars

• Grant C. Killoran:
  • Super Lawyer

• Dean P. Laing:
  • Top 10 Attorneys in Wisconsin
  • Top 50 Attorneys in Wisconsin
  • Top 25 Attorneys in Milwaukee
  • Super Lawyer

• Trevor C. Lippman:
  • Rising Stars

• Gregory W. Lyons:
  • Super Lawyer

• Patrick G. McBride:
  • Super Lawyer

• Britany E. Morrison:
  • Rising Stars

• Joseph D. Newbold:
  • Super Lawyer

• Erica N. Reib:
  • Rising Stars

• Chad J. Richter:
  • Super Lawyer

• John R. Schreiber:
  • Super Lawyer

• Jason R. Scoby:
  • Super Lawyer

• Steven J. Slawinski:
  • Super Lawyer

• Kelly M. Spott:
  • Rising Stars

• Christa D. Wittenberg:
  • Rising Stars

Super Lawyers is a national rating service that rates attorneys in all 50 states. The selection process utilized by Super Lawyers is multi-phased and includes independent research, peer nominations, and peer evaluations. One court recently had this to say about Super Lawyers:

“[T]he selection procedures employed by [Super Lawyers] are very sophisticated, comprehensive and complex.  It is abundantly clear . . . that [Super Lawyers does] not permit a lawyer to buy one’s way onto the list, nor is there any requirement for the purchase of any product for inclusion in the lists or any quid pro quo of any kind or nature associated with the evaluation and listing of an attorney or in the subsequent advertising of one’s inclusion in the lists.”

We are proud to be one of the few firms in Wisconsin that had more than 50% of its attorneys receive recognition by Super Lawyers.

O’Neil Cannon has been ranked in the 2023 U.S. News – Best Lawyers® “Best Law Firms” list in 16 practice areas:

• Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law
• Business Organizations (including LLCs and Partnerships)
• Commercial Litigation
• Construction Law
• Corporate Law
• Employment Law – Management
• Litigation – Bankruptcy
• Litigation – Insurance
• Litigation – Labor and Employment
• Mergers and Acquisitions Law
• Personal Injury Litigation – Plaintiffs
• Product Liability Litigation – Defendants
• Real Estate Law
• Securities / Capital Markets Law
• Tax Law
• Trusts and Estates Law

Firms included in the 2023 “Best Law Firms” list are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal expertise.

Newsletter Article Highlights:

• Anne Heche’s Will Contest: A Cautionary Tale
• How Joint Accounts Can Ruin Your Estate Plan
• Understanding Common Notices Individuals Receive from the IRS
• How Does Life Insurance Work with an Estate Plan?
• Seventh Circuit Holds That Light Duty Policy Did Not Violate the PDA

Firm News:

• The Firm Welcomes Four New Attorneys
• Attorney Jessica Haskell Elected to the Board of Directors of the State Bar’s Bankruptcy, Insolvency and Creditors’ Rights Section
• Attorney Erica Reib Reelected to the Board of the State Bar’s Labor and Employment Section
• 19 OCHDL Lawyers Selected as 2023 Best Lawyers®; Another 4 Named Best Lawyers: Ones to Watch

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Attorney Jessica K. Haskell was recently selected as the new chair of the Bankruptcy Section of the Milwaukee Bar Association. The Bankruptcy Section of the Milwaukee Bar Association is focused on providing continuing legal education seminars and engaging section members. Jessica is a member of O’Neil Cannon’s Banking, Receivership, and Creditors’ Rights Practice Group. She represents court-appointed receivers, secured and unsecured creditors, financial institutions, and corporations in state and federal court. Jessica is pleased to be selected as the new chair and looks forward to being involved with the Bankruptcy Section in her new role.