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Industry And Estate Tax Update Letter, October 2016 - Pat Soldano

Permit me to start this quarterly letter with an important update:

In my last letter I said that the IRS had yet to issue its new proposed regulations for Section 2704 of the tax code concerning valuation discounts for family related entities.

On August 2, the IRS issued their much anticipated proposal.  Essentially it calls to limit the use of discounts, when valuing interests in family entities for estate, gift and generation-skipping transfer tax purposes.

If this legislation passes, it will restrict the use of “lack of control” and “lack of marketability” when valuing family business interests, thereby increasing the valuation for estate, gift and generation-skipping transfer tax purposes of any family business interests transferred, or owned at death.  While this rule only affects business assets passed on from one family member to another, (it does not affect business assets passed on to non-related parties) the gift and estate tax on affected family businesses could rocket by 30-40%. This as a direct attack on family businesses and partnerships.

We are now in a 90-day opinion period until November 2, 2016. On December 1st the Treasury will hold a public hearing.  I will be flying to Washington DC to attend the hearing, along with families who have agreed to address the Treasury during the public comment period.

If you would like to add your voice to the issue, or better still, join us in DC, please go to the Treasury website (below*) to register your comment or sign up to attend.

Proposed Regulations could become permanent 30 days after the hearing. This is a complex issue and I would urge you to contact your estate attorney in regard to your particular situation.


On to less contentious topics!   As you likely know, millennials now outnumber baby boomers.  They are making their presence felt everywhere, including in the family office and wealth management industry. I’m intrigued by the different way they see the world and recently co-authored an article published in Trusts and Estate Magazine with Lauren Benanti, Director of Family Education for GenSpring – and herself a millennial! Enclosed is a copy of “Millennials and the Family Office” which I hope you might find of interest.

I will also be talking on these millennial-influenced and other trends at several venues over the next few weeks: IvyFON in San Francisco on 11/10, and in Los Angeles on 12/8. I am also presenting on a panel discussing, “Changing Demographic Trends; Hang on Millennials”, on November 4th in Newport Beach at the annual UC/Irvine, Center for Investment and Wealth Management Retreat.   For those of you in the Boston area, on Nov. 17th, I will be presenting on post-election “Estate Tax and Politics” at Family Firm Institute at an evening event.

My GenSpring colleagues are also busy presenting in the coming weeks – and again just let us know if you would like to attend any of these events:

  • October 28 – Napa, Sandy Juranich, Senior Family Wealth Advisor — Opal’s Napa Family Office Forum on “Building Bridges: Family Governance Best Practices”.
  • November 2-3 – San Francisco, Chris Walters, Managing Director of GenSpring’s Western Region — IPI Fall Forum; “Investing with a Conscience: How Socially Responsible Investing Has Been Transmuted”.
  • December 4-6, Dana Point, CA, Puneet Sahi, Senior Family Investment Officer — Opal’s Alternative Investment Summit.
  • March 17-19, 2017 – Sarasota, Florida, GenSpring will host clients at its Family Symposium, an education event that provides an opportunity for families to connect and build relationships in a relaxed setting.

For a complete list of events in which GenSpring will be participating please visit our web site at

By the time of my next letter we will know who will be our next President. Nevertheless, many of the issues attached to our clients and to our own family office business remain unpredictable. I will continue to keep you informed as best I can — and, as always, I enjoy receiving your comments and questions.

With early good wishes for the start of the Holiday Season.

Yours truly,



Yours truly,
Patricia M. Soldano