Case 1: The Revocable Trust That Offered No Protection

We came across a case where a family believed their revocable trust would protect their assets from probate, from lawsuits, and death taxes.

But the trust was never funded, some of the documents were conflicting, and the client retained full control of the assets that were supposed to be in the "asset protection trust" - triggering full estate inclusion.

Issue:
Does a revocable trust protect assets from lawsuits or estate taxes?

Rule:

IRC §2036 – Inclusion of assets where decedent retained possession, enjoyment, or income.

IRC §2038 – Includes assets where the decedent had power to alter or revoke.

Doctrine: Retained enjoyment / control test.

Case: U.S. v. Estate of German, 7 Cl. Ct. 641 - Assets in revocable trust were fully includable in estate.

Analysis:
Revocable trusts are effective for avoiding probate, but they do not shield assets from creditors or estate tax if the grantor retains control. The client mistakenly believed the trust removed assets from the estate, but everything remained under their legal power and name - which means that those assets would have to go through probate, unless there was another mechanism (like transfer upon death) in place. Furthermore, revocable trusts do not offer "Asset Protection" as the assets are still under the control of the grantor.

Conclusion:
We evaluated the situation and architected a more comprehensive plan that was fluid and aligned with the client’s intentions.

We restructured the estate into coordinated zones:

1. Part of the estate: Funded trusts and a pour-over will updated to reflect the current portfolio and intent.

2. Removed from the estate: Irrevocable trusts with no retained powers to hold appreciating assets and protect them from lawsuits or estate inclusion.

3. Strategic alignment: Brought the estate attorney, CPA, and insurance agent into alignment under one legal blueprint.

4. Gap closure: Hidden estate tax exposure exceeded $1.2M due to unfunded trusts.

5. Foundation layer: We added a private foundation to shift future charitable gifts and provide deduction stacking opportunities and flexible family stewardship.

This new architecture created clarity, flow, and protection - like water reshaping stone without resistance.

Case 2: A Will That Led to Probate Chaos

One client had a beautifully drafted will but assumed it would avoid probate. It didn’t.

Upon death of the grantor, the estate went through a 14-month court process, costing thousands in fees.

The client approached us to find out if assets could go through probate a second time.

Issue:
Can a will alone prevent probate delays, fees, or court control?

Rule:

Uniform Probate Code §2-101 – Wills must be submitted to probate court to be effective.

Case: In re Estate of Fick, 678 S.E.2d 46 (N.C. Ct. App. 2009) — Will triggered full probate process.

Doctrine: Testamentary instruments require judicial validation unless assets pass by operation of law.

Analysis:
The client had a well-written will, but assets were held individually — not in a trust or with designated beneficiaries. Probate took 14 months and cost 6% of the estate value. The myth that “a will avoids probate” cost the family time, privacy, and money.

Conclusion:
We audited the estate and uncovered structural weaknesses caused by reliance on a standalone will.

We rebuilt the structure with the following breakdown:

1. Part of the estate: A coordinated pour-over will and living trust funded with all personal, real, and business assets.

2. Removed from the estate: Certain illiquid assets moved into a trust with no retained powers, managed by a trustee.

3. Strategic alignment: We aligned legal documents with actual titles, accounts, and beneficiaries held across various institutions.

4. Gap closure: Eliminated probate risk across the board, reducing administrative burden from 18 months to zero.

5. Foundation layer: Added a philanthropic legacy plan to hold excess wealth and support family-controlled impact initiatives.

This created flow where there was rigidity - a living, breathing estate design.

Case 3: “I Gave It Away” - But the IRS Can Pull It Back Into My Estate?

We reviewed an estate plan where the client had transferred assets to a family partnership - but still retained control and lived off the income. The IRS has successfully sued hundreds of people with these sorts of arrangements.

Legal Gap: Retaining benefit or control invalidates the gift.

Code: IRC §§2036 & 2038

Case Law: Estate of Strangi v. Commissioner, 417 F.3d 468

Conclusion:
The structure looked compliant on paper, but we discovered retained control through management rights and income access. We corrected the plan by:

Part of the estate: Kept core family assets in trusts with tax-friendly structuring.

Removed from the estate: Transferred FLP assets into a fully executed irrevocable trust with separate voting/control rights.

Strategic alignment: Replaced the informal team with a coordinated family office approach.

Gap closure: Reversed IRS risk of estate pullback under §2036 and §2038.

Foundation layer: Created a charitable foundation to receive future appreciated gifts, unlocking income tax benefits and multigenerational giving flexibility.

The plan now adjusts like water — flowing through asset classes and legal silos.

Case 4: The ILIT (Irrevocable Life Insurance Trust) That Almost Backfired

A client held a $4 million life insurance policy inside an ILIT, thinking it was excluded from their estate.

But they retained the right to change beneficiaries and also take loans against the death benefit - a fatal flaw in the structure.

Legal Gap: Incidents of ownership = estate inclusion.

Code: IRC §2042

Case Law: Estate of Jordahl v. Commissioner, 65 T.C. 92

Conclusion:
The ILIT was compromised by retained rights. We rebuilt the structure with:

Part of the estate: Personal-use insurance policies realigned with proper beneficiary setup and aligned with revocable trust and wills.

Removed from the estate: New ILIT created, funded through split-dollar arrangement with no retained incidents of ownership.

Strategic alignment: Trustee and insurance team were integrated under a legal supervision plan.

Gap closure: $5M policy moved out of estate, avoiding a $2M tax risk.

Foundation layer: A charitable foundation was layered in to offer the client more flexibility in the future as they continue to gift more assets (insurance and otherwise) to the foundation, thereby removing it from the estate, while maintaining control of the investments.

Now the structure flows with audit-proof compliance and future-ready flexibility.

Case 5: The Irrevocable Trust with No Trustee Was Not Really Independent...

We encountered an irrevocable trust set up several years ago - but the trustee had passed away, and no successor had been appointed. In the interim, the Grantor and his spouse were making all decisions, managing the administration, and even conducting distributions. This indicates there was no present gift made = estate inclusion. This is a situation where a completed gift may, inadvertently, become incomplete because the formalities were not followed - despite the good intent.

Legal Gap: A trust without an acting trustee or funded assets offers no protection: Control = No asset protection.

Code: Uniform Trust Code §704, IRC §2503

Case Law: Estate of Riese v. Commissioner, T.C. Memo 2010-76

Conclusion:
What looked like an estate plan was an empty vessel. We recreated the structure by:

Part of the estate: Personal-use assets retained in a core family trust with a clear successor plan.

Removed from the estate: Revived and funded the irrevocable trust with a licensed third-party trustee.

Strategic alignment: CPA, attorney, and trustee coordinated under quarterly audit compliance.

Gap closure: Avoided full estate inclusion and revalidated gift transfers with proper Form 709 filing.

Foundation layer: Legacy income was redirected to a newly formed nonprofit to manage education and impact-based distributions.

The estate went from abandoned to architected - from frozen to flowing.

Case 6: Crypto Gone Forever

A tech founder approached us looking for asset protection on his $23M crypto wallets. He believed it was outside the estate, not subject to death taxes, and only faced capital gains taxes. He wanted to ensure these assumptions were true, that his existing structures could accomplish these goals, and there were any new cases to change this perspective. He also owns several insurance policies and real estate investments in other "trusts".

Issue:
Is cryptocurrency includable in the gross estate?

Rule:

IRC §2031 – All property, tangible or intangible, is included in the gross estate at fair market value.

IRC §1014 – A step-up in basis applies at death for appreciated property.

IRS Notice 2014-21 – Cryptocurrency is treated as property, not currency.

Case: IRS v. Coinbase, No. 17-cv-01431 - Court compelled disclosure of user data.

Analysis:
Crypto holdings - even in cold storage or locked wallets - are estate-includable assets. If there's no trust or legal ownership structure, they trigger probate, estate tax, and possibly capital gains or loss of basis documentation.

Conclusion:
We evaluated the full legal and asset profile - including wallets, exchange accounts, and self-custody protocols - and found no legal ownership or access plan in place. We architected a fluid crypto estate strategy by:

Part of the estate: Traditional personal and business assets remained in a core funded trust and updated pour-over will.

Removed from the estate: Crypto assets were retitled into a dedicated irrevocable crypto trust, with cost basis logging, wallet access protocols, and FMV tracking in place.

Strategic alignment: Coordinated efforts with the client’s crypto advisors, CPA, estate planner, financial advisors, insurance advisors, and real estate agents to ensure ALL the entities and trust structures were aligned and did not leave gaps and holes in "communication and strategy".

Gap closure: Avoided IRS disputes by pre-logging value and ownership, preventing constructive receipt challenges.

Foundation layer: Designed a nonprofit arm to receive post-mortem crypto distributions to fund education, open-source tech grants, and community investments.

We turned a vulnerable digital asset into a resilient legacy vehicle - securing clarity, compliance, and contribution.

Case 7: The Missing Crummey Notices, Gift Form 709, and Incidents Of Ownership

We audited an ILIT where annual gifts had been made for years - but no Crummey notices were issued and no Form 709s filed. The IRS could deem all gifts incomplete.

Legal Gap: Without written notices, annual exclusions don’t apply.

Code: IRC §2503(b), Form 709

Case Law: Estate of Cristofani, 97 T.C. 74

Conclusion:
After reviewing gifting logs, trust documents, and trustee actions, we discovered a pattern of missing Crummey notices and unfiled Form 709s. We redesigned the system to:

Part of the estate: Core family assets were secured under a revalidated estate plan with funded revocable trusts and annual gifting strategy.

Removed from the estate: Rebuilt the ILIT and supporting gifting structure using third-party trustees and automated notice issuance, ensuring future gifts qualified for annual exclusion.

Strategic alignment: Brought together the estate planning attorney, CPA, and trustee to collaborate on a shared compliance calendar.

Gap closure: Protected $2.4M in insurance value from being pulled back into the estate and avoided audit penalties.

Foundation layer: Layered in a family-run foundation as a flexible recipient of non-insurance gifts - adding charitable leverage, grant-making capacity, and tax flexibility.

This revised plan flowed like water - removing static risk and replacing it with synchronized, proactive movement.

Case 8: Stock That Triggered a Tax Avalanche

A couple held $18M in appreciated stock with almost no cost basis. Their financial advisor said to "wait for the step-up."

But their estate was well over the exemption limit, exposing the entire value to a 40% estate tax.

Legal Gap: Step-up doesn’t eliminate estate tax over exemption.

Code: IRC §§1014, 2031

Case Law: Estate of Chenoweth v. Commissioner, 88 T.C. 1577

Conclusion:
We conducted a full diagnostic of the client's estate, investment holdings, and capital gains exposure. Their $18M stock position had no protective planning in place. We restructured by:

Part of the estate: Allocated a portion of income-producing stock to a grantor trust, with income flowing to family members.

Removed from the estate: Transferred bulk appreciated shares into a CRT (aligned with a foundation) to defer capital gains and eliminate estate inclusion.

Strategic alignment: Worked alongside the CPA, portfolio manager, and estate attorney to optimize cost basis, timing, and future control mechanisms.

Gap closure: Prevented $7.2M in potential estate and capital gains taxes, while allowing the client to control the timing of the stock liquidation.

Foundation layer: Established a private foundation funded by residual CRT assets to preserve philanthropic control and provide intergenerational education tools.

By channeling what was static and taxable into movement, we created flow, liquidity, and legacy all at once.

Case 9: A Deferred Sales Trust That Collapsed

A business owner sold a $6M property using a DST promoted by non-attorneys.

But the structure failed an internal "estate and tax sniff test" that we performed.

That could result in penalties, back-taxes, and even criminal evasive action.

Legal Gap: DSTs not properly constructed fail “substance over form” tests.

Code: IRC §453

Case Law: IRS Chief Counsel Memo 202118016

Conclusion:
We analyzed contracts, tax filings, and DST promoter documentation. The trust failed IRS scrutiny on economic substance. We responded with a strategic pivot:

Part of the estate: Preserved personal-use real estate and essential holdings in a compliant revocable trust.

Removed from the estate: Dissolved the DST and restructured into a CRT and installment note combo backed by legal opinion and IRS-vetted precedent.

Strategic alignment: Brought in qualified legal counsel and a CPA with experience in IRC §453 compliance to file corrective documents.

Gap closure: Eliminated IRS exposure, reduced audit risk, and requalified gain deferral.

Foundation layer: Created a long-term family foundation to eventually absorb the residual proceeds and enable purpose-driven capital allocation.

Instead of fighting fire with fire, we flowed around the audit — adapting the structure while staying fully within the boundaries of tax law.

Case 10: The Conservation Easement Tax Shelter

An investor bought into a syndicated easement promising a 4X deduction. The IRS disallowed the appraisal, flagged the transaction as abusive, and assessed back taxes and penalties.

Legal Gap: Abusive easements are on the IRS Dirty Dozen list.

Code: IRC §170(h), IRS Notice 2017-10

Case Law: Champions Retreat v. Commissioner, 959 F.3d 1033

Conclusion:
We analyzed contracts, tax filings, and DST promoter documentation. The trust failed IRS scrutiny on economic substance. We responded with a strategic pivot:

Part of the estate: Preserved personal-use real estate and essential holdings in a compliant revocable trust.

Removed from the estate: Dissolved the DST and restructured into a CRT and installment note combo backed by legal opinion and IRS-vetted precedent.

Strategic alignment: Brought in qualified legal counsel and a CPA with experience in IRC §453 compliance to file corrective documents.

Gap closure: Eliminated IRS exposure, reduced audit risk, and requalified gain deferral.

Foundation layer: Created a long-term family foundation to eventually absorb the residual proceeds and enable purpose-driven capital allocation.

Instead of fighting fire with fire, we flowed around the audit — adapting the structure while staying fully within the boundaries of tax law.