Financial Assets Series
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This year's Institute features a series of afternoon programs focusing on Financial Assets in estate planning. The series covers the taxation of alternative investment products sold to individuals, the effect of the financial crisis on modern financial theory and the Prudent Investor Rule, and the income taxation of life insurance.

 

Wednesday, January 16, 2013 – Special Session I-F (2:00 – 3:30 p.m.)
The Prudent Investor Rule After the Financial Crisis
Max M. Schanzenbach, Stephen B. Malech, Susan Porter, Robert H. Sitkoff

 

In the wake of the Financial Crisis of 2008, modern financial theory has come under increasing scrutiny. This session will examine the relevance, if any, of evolving views on portfolio theory, efficient markets, and "behavioral" finance for the Prudent Investor Rule and trust investment practice. Particular attention will be paid to trustee compliance, both from empirical and advisory perspectives, as well as to liability exposure and planning considerations.

 

Wednesday, January 16, 2013 – Special Session II-F (3:50 – 5:20 p.m.)
The Taxation of "Exotic" Investment Products Sold to Individuals
Paul S. Lee

 

Investing has gone beyond simply stocks, bonds, and mutual funds. High-net-worth individuals are being offered a dizzying array of "alternative" asset classes and investments (commodities, foreign currency, gold, structured notes, exchange-traded notes, foreign debt, leveraged ETFs, etc.). These investments commonly utilize complex financial instruments and structures, the taxation of which often catches the taxpayer and tax professionals unaware. This presentation will discuss the taxation of these "exotic" investments from the investor's standpoint.

 

Thursday, January 17, 2013 – Fundamentals Program (3:50 – 5:20 p.m.)
So, You Think You Know Everything About the Income Taxation of Life Insurance? Think Again!
Donald O. Jansen, Lawrence Brody

 

This session will examine why income tax exemptions for death proceeds and cash value accumulations are not always available; the deductibility of interest on policy loans is hardly ever available; accessing cash values may or may not be tax-free; the definitions of policies for tax purposes are actuarial; policy exchanges aren't always tax-free; Crummey trusts have income tax consequences; and will explore other little known aspects of the income taxation of policies.