Law and Tax Library

Explore our collection of business, estate, nonprofit, tax, and probate mistakes, myths, legal ruling, and practical tips to bypass these hidden traps

1. Legal Entities, Definitions, and Foundational Concepts

Understanding structure, ownership, and control:

LLC (Limited Liability Company) – Control, tax classification, estate inclusion risks

S-Corporation (IRC §1361) – Eligibility, QBI, payroll, vs. LLC

C-Corporation (IRC §11) – Double tax, strategic retention, fringe benefit play

Partnerships (IRC §§761, 704, 731) – Allocation of income, basis adjustments, pass-through risk

Sole Proprietorship – Unlimited liability, lack of planning

Nonprofits (IRC §501(c)(3)) – Public vs. private, income treatment, donation leverage

Foundations (IRC §§4940–4947) – Legacy + tax tool; integration gaps

Trusts (Revocable vs. Irrevocable) – Grantor vs. non-grantor, estate inclusion, asset protection

Family Limited Partnerships (FLPs) – Valuation discounts, IRC §2703 issues

Spousal Lifetime Access Trusts (SLATs) – Estate freeze with spousal access

Charitable Remainder Trusts (CRTs) – Income stream + charitable deduction

Deferred Sales Trusts (DSTs) – IRC §453 compliance, promoter scrutiny

Holding Companies & Layered Structures – Risk of form over substance

ILIT (Irrevocable Life Insurance Trust) – Estate tax bypass, Form 709 compliance

2. Tax Concepts

Income, estate, gift, basis, deductions, and entity treatment:

IRC §61 – Gross Income Definition

IRC §11 – C-Corp Tax Rate

IRC §1401 – Self-Employment Tax

IRC §2031–2042 – Estate Inclusion Tests

IRC §2042 – Insurance Ownership Trap

IRC §2036, §2038 – Retained Control & Enjoyment

IRC §704, §731 – Partnership Basis Adjustments

Form 709 – Gift Tax Reporting & Gaps

QBI Deduction – IRC §199A

Augusta Rule – IRC §280A(g)

Cost Segregation – Accelerated Depreciation + Audit Traps

Installment Sale – IRC §453

Substance over Form Doctrine

Step Transaction Doctrine

Assignment of Income Doctrine

Economic Substance Doctrine

3. Estate planning concepts

Ownership at death, planning documents, inheritance taxation:

Probate Law & Uniform Probate Code (UPC §§2-101, 3-101)

Wills vs. Trusts – Transfer Pathways

Double Probate (Spouse-to-Spouse)

Pour-Over Wills & Funding Issues

Control = Inclusion Doctrines

Business Succession at Death (IRC §2031 Valuation)

Non-Probate Transfers (TOD, POD, JTWROS)

Gifting Strategies & Estate Freeze Tools

Step-Up in Basis Gaps (Lack of Valuation)

Incomplete Gifts – Retained Control = Pullback

Crypto & Digital Asset Inheritance

Stock Portfolio Inclusion – Gift vs. Inheritance Trap

Life Insurance in Estate – Misuse of ILITs

Grantor Trust Rules – Revocable vs. Non-Grantor

Spousal Transfers & Unlimited Deduction Limitations

4. Key Case Studies & Legal Doctrines

Real rulings, real risks, real lessons

Estate of Strangi v. Commissioner – Retained control = estate inclusion

Estate of Giustina – Valuation discounts disallowed

Estate of Powell – Control through partnership = §2036 inclusion

Estate of Morrissette – Split-dollar life insurance gone wrong

U.S. v. Estate of German – Revocable trust = no asset protection

IRS v. Coinbase – Crypto user data compelled

Estate of Gloeckner – Business valuation = full estate inclusion

Keffeler v. Keffeler – Crypto inheritance dispute

Crummey v. Commissioner – Annual gift exclusion test case

Holland v. Commissioner – Assignment of income ignored

Piedmont Cotton Mills v. Commissioner – Step transaction doctrine

IRS Dirty Dozen Lists (2021–2024) – Risk categories for enforcement

Substance Over Form Doctrine – IRS priority in determining reality over labels

5. Gaps, Traps, and Legal Myths

Mythbuster AI that protects your wealth from misinformation:

“I have a revocable trust – I’m protected”

“My will avoids probate”

“My business passes automatically to my heirs”

“Insurance is tax-free – not in my estate”

“Crypto is invisible to the IRS”

“Hiring my kids is always a deduction”

“The Augusta Rule lets me write off my house”

“My ILIT is airtight – no estate risk”

“I filed the trust – that’s all I need to do”

“Nonprofits don’t pay tax – so mine is safe”

“Cost Segregation saves me from taxes forever”

“Cook Islands = bulletproof protection”

“Deferred Sales Trust avoids capital gains”

“I donated assets = no estate tax”

“A will or trust is enough – I don’t need a team”

“One-size-fits-all planning is good enough”

“Foundation = vanity play only, no tax value”

Each myth is backed by real IRS rules, court cases, and fix strategies in the Mini Family Office system.

6. The Fix: Flow Like Water™ – The Mini Family Office™ Solution

Be flexible. Be coordinated. Be protected.

ARM Your Estate™ – Align | Restructure | Mitigate

Be Like Water™ Strategy – Flow around gaps, adapt to terrain

Multi-Entity Layering – Separate ownership, usage, and control

Team-Based Planning – Lawyer + Tax + Finance + Philanthropy

Education First – Know before you file

Legacy Planning – Foundation + Trust + Entity = Protection

Audit-Ready Architecture – Code-aligned, case-precedent-proof

Mini Family Office™ Engine – Personal CFO, Legacy Architect, Tax Strategist

7. Legal, Tax, and Financial Scams, Ponzi Schemes, and Rabbit Holes To Avoid

Examining OBBB (The New Law Enacted By President Trump In July 2025)

IRS Dirty Dozen Scams

DOJ Updates

FTC Violations

Billion Dollar Law & Tax Mistakes

Here are 101 cases that cover a range of business succession, intellectual property, estate planning, and advanced estate and tax planning strategies... that went wrong!!!

The goal: Learn from someone else's mistakes so you don't have to make them, and your family does not have to face the consequences of your mistakes

29 BUSINESS SUCCESSION MISTAKES, MYTHS, GAPS, AND TRAPS THAT CAN ERODE YOUR LIFE'S WORK...

  • Myth #1: The Giustina Case: Why Your LLC Is a Roadblock, Not a Shield, Against Probate (IRC §2033)

  1. Myth #2: The Strangi Case: You Transferred Your Business to a Trust, But the IRS Still 'Clawed It Back' (IRC §2036)

  2. Myth #3: The True v. Commissioner Case: Why a "Dusty" Buy-Sell Agreement Won't Save You from the IRS (IRC §2703)

  3. Myth #4: The Maggos Case: Your "Freeze" Technique Backfired—Here's Why (IRC §§2036, 2038)

  4. Myth #5: The Eddy Case: A Missed 9-Month Deadline Cost This Estate Millions in Taxes (IRC §2032)

  5. Myth #6: The Anderson Case: Why a Lack of Valuation Can Cost an Estate Millions (IRC §2031(b))

  6. Myth #7: Your Will Is a Map to Probate, Not a Way to Avoid It (UPC §3-101)

  7. Myth #8: The Family Business Case: Your Family Has No Authority to Run Your Business Without This Document (UPC §3-307)

  8. Myth #9: The ILIT Audit: How Your "Tax-Free" Life Insurance Could Still Be Taxed (IRC §2042)

  9. Myth #10: The Church & Giselman Cases: The IRS Knows About Your Gifts, Even If You Didn't File the Paperwork (IRC §2511)

  10. Myth #11: The Steinberg Case: An Improperly Structured LLC Can Lead to Probate (UPC §2-101)

  11. Myth #12: The Dorn Case: Your "Phantom Equity" Isn't Invisible to the IRS (IRC §§2036, 2038)

  12. Myth #13: The Robinson Case: Procrastinating on Your Valuation Cost an Estate Millions (IRC §§2031, 2032)

  13. Myth #14: The Church v. U.S. Case: Gifting Property, Not Just Cash, Can Trigger Tax Penalties (IRC §2511)

  14. Myth #15: The Littick v. Comm. Case: An Internal Price Agreement Won't Fool the IRS (IRC §2703)

  15. Myth #16: The Klauss Case: The IRS Can Reject Your Valuation and Apply Its Own (IRC §2031)

  16. Myth #17: The True v. Commissioner Case: Why a "Dusty Document" Is Worthless in an Audit (IRC §2703)

  17. Myth #18: The Maxine Robinson v. Comm. Case: A Missing "Death Clause" Caused a Valuation Dispute (UPC §2-101)

  18. Myth #19: The S-Corp Case: How a Will Can Accidentally Cause Your S-Corp to Lose Its Tax Status (IRC §1361(b) (1) (B))

  19. Myth #20: The Thompson v. Comm. Case: Registering IP in an LLC Doesn't Protect It from Estate Tax (IRC §§2036, 2038)

  20. Myth #21: The Joint Bank Account Case: Joint Accounts Don't Grant Legal Control of a Business (Uniform Probate Code)

  21. Myth #22: The IRS v. Coinbase Case: Your Crypto Is Trackable, Taxable, and Easily Lost Forever (IRC §2031)

  22. Myth #23: The Estate of German Case: Your Revocable Trust Avoids Probate, But Not Estate Tax (IRC §2038)

  23. Myth #24: The Estate of Gallo Case: No Plan Means Family Fights That Cost Millions in Legal Fees (UPC §3-112, IRC §2031)

  24. Myth #25: The Estate of Linton Case: The IRS Will Tax a Paper-Only Gift (IRC §2511)

  25. Myth #26: The Estate of Wheeler Case: Deathbed Transfers Are a Red Flag for the IRS (IRC §2035(a))

  26. Myth #27: The Estate of Powell Case: Serving as a Trustee of Your Own Irrevocable Trust Puts Your Assets at Risk (IRC §§2036, 2038)

  27. Myth #28: The S-Corp Case: A Will Can't Transfer S-Corp Shares to Just Anyone (IRC §1361)

  28. Myth #29: The Hackl v. Commissioner Case: Don't Assume Your Gifts Are Under the Exclusion Limit (IRC §2503(b))

21 LAW AND TAX MISTAKES THAT DESTROYED VALUABLE INTELLECTUAL PROPERTY

  • Myth #30: The Thompson v. Comm. Case: Your "Personal" IP Is Part of Your Taxable Estate (IRC §2031)

  1. Myth #31: The Steinberg v. U.S. Case: Registering Your IP Is Just Step One to Avoiding Estate Tax (IRC §2031)

  2. Myth #32: The Estate of Prince Case: A Lack of Planning Can Freeze Your IP Rights and Royalties for Decades (IRC §2033)

  3. Myth #33: The Thompson v. Commissioner Case: Your Personally Owned Patent Isn't Licensed to Your Business by Default (IRC §2036)

  4. Myth #34: The Powell v. Commissioner Case: An LLC Won't Protect Your IP If You Retain Control (IRC §2038)

  5. Myth #35: The Estate of German Case: Your Revocable Trust Won't Remove IP Value from Your Estate (IRC §2038)

  6. Myth #36: The Michael Jackson Estate Case: Don't Underestimate the Value of Your IP (IRC §2031)

  7. Myth #37: The Estate of Cecil v. Commissioner Case: The IRS Will Assign a Value to Your Trademark (IRC §2031(b))

  8. Myth #38: The Estate of Steinberg Case: The IRS Can Include Future Royalties in Your Estate's Valuation (IRC §§2031, 691)

  9. Myth #39: The Church v. U.S. Case: Informal Gifts of IP Are Ignored by the IRS (IRC §2511, §2701)

  10. Myth #40: The Whitney Houston Estate Case: Intangible IP is Not Safe from Estate Tax (IRC §2031)

  11. Myth #41: The Aretha Franklin Case: How a Handwritten Will Led to Chaos Over an $80M Estate

  12. Myth #42: The King of Random Case: A Digital Empire Can Be Lost Without a Trust

  13. Myth #43: Your Will Won't Protect a Real Estate Business from Probate

  14. Myth #44: The Thompson Case: Your Personal Brand Can Get Stuck in Probate, Freezing Ad Revenue

  15. Myth #45: The Bob Marley Estate: Why a Lack of a Will Led to Decades of Legal Battles Over a Multi-Million Dollar Estate

  16. Myth #46: The Jimi Hendrix Estate: Planning Isn't Just for Large Estates

  17. Myth #47: The Heath Ledger Estate: How Outdated Documents Can Result in Poor Asset Distribution

  18. Myth #48: The Robin Williams Case: Your Name and Likeness Are Property That Must Be Assigned

  19. Myth #49: The Amy Winehouse Case: Why Delaying Estate Planning Is the Enemy of Your Legacy

  20. Myth #50: The Philip Seymour Hoffman Case: Why Outdated Documents Can Be as Bad as Having No Documents at All

20 LIFE INSURANCE MISTAKES AND TRAPS THAT DILUTE YOUR "INSURANCE POLICIES"

  • Myth #51: The Estate of Kurihara Case: Retaining Control Over a Life Insurance Policy Triggers Estate Inclusion (IRC §2042(c))

  1. Myth #52: The Estate of Becker Case: The 3-Year "Look-Back" Rule Is Real and Can't Be Ignored (IRC §2035(a))

  2. Myth #53: The Kurihara Case: Paying Premiums for an ILIT from a Personal Account is a Red Flag for the IRS (Treas. Reg. §20.2042-1(c)(2))

  3. Myth #54: The ILIT Trustee Case: Serving as Your Own Trustee Is a "Red Flag" for the IRS (Treas. Reg. §20.2042-1(c)(2))

  4. Myth #55: The Corporate Policy Case: Why a Policy Owned by Your Corporation Still Counts in Your Estate (IRC §§2036, 2038)

  5. Myth #56: The Crummey Case: Waivers Are Not Enough—Beneficiaries Must Have a Real Withdrawal Right (IRC §2503(b))

  6. Myth #57: The Whole-Life Policy Case: Your Policy's Cash Value Can Trigger Estate Inclusion (Treas. Reg. §20.2042-1(c)(2))

  7. Myth #58: The Spouse Case: Paying Premiums for a Spouse-Owned Policy Still Counts (IRC §2042)

  8. Myth #59: The Split-Dollar Case: Retaining Any Right to a Loan or Dividend Can Kill Your Plan (Treas. Reg. §20.2042-1(c)(2))

  9. Myth #60: The Physician Case: Even Small Policies Can Push Your Estate Over Tax Thresholds (IRC §2042)

  10. Myth #61: The Levine Case: A Split-Dollar Arrangement Can Still Trigger Estate Inclusion (IRC §§2036, 2038)

  11. Myth #62: The Connelly v. United States Case: The Supreme Court Just Ruled That Corporate-Owned Insurance Can Be Included in Your Estate (IRC §§2036, 2038, 2703)

  12. Myth #63: The Estate of Levine Case: The IRS Taxes the Entire Benefit Stream of a Split-Dollar Deal, Not Just the Receivable (IRC §§2036, 2038, 2042, 2703)

  13. Myth #64: The Kurihara Case: The Timing of Your Transfer Can Overrule the Formal Documents (IRC §2035(a))

  14. Myth #65: The Kurihara Case: The IRS Can Attribute a Trustee's Actions to You (Treas. Reg. §20.2042-1(c)(2))

  15. Myth #66: The Levine Case: How the IRS Disregarded a Trust and Taxed a Split-Dollar Receivable (Treas. Reg. §1.61-22, IRC §§2036, 2038, 2703)

  16. Myth #67: An ILIT Modification Can Resurrect a Dead Tax Problem (IRC §§2035(a), 2038)

  17. Myth #68: The Kurihara Case: Retaining the Power to Change Beneficiaries Is a Red Flag for the IRS (Reg. §20.2042-1(c)(2))

  18. Myth #69: Heirs Paid Tax on "Income in Respect of a Decedent" (IRC §691)

  19. Myth #70: The Connelly v. United States Case: How One Policy Can Trigger Multiple Tax Penalties (IRC §§2036, 2038, 2042)

13 HIGH-VALUE INVESTMENTS, DIGITAL ASSETS, STOCKS, AND ESTATE PLANNING MISTAKES

  • Myth #71: U.S. v. Estate of German Case: A Revocable Trust Avoids Probate, But Not Estate Tax (IRC §2038)

  • Myth #72: The Estate of Fick Case: A Will Is a Roadmap to Probate, Not a Way to Avoid It (UPC §2-502)

  • Myth #73: The Estate of Littick Case: Stocks Are Frozen at Death Without This Simple Document (IRC §2031)

  • Myth #74: The IRS v. Coinbase Case: Your "Invisible" Crypto Is Trackable and Taxable (IRS Notice 2014-21)

  • Myth #75: The Estate of Young v. Commissioner Case: Joint Tenancy Is a Death Trap, Not a Solution (IRC §2040)

  • Myth #76: The Estate of Braman Case: Why Your Vacation Home Can Trigger a Second Probate in Another State

  • Myth #77: The Estate of Strangi v. Commissioner Case: The IRS Disregarded a Family Partnership for Retained Control (IRC §2704)

  • Myth #78: The Estate of Giustina v. Commissioner Case: A Business Real Estate LLC Is Not Protected from Probate (IRC §2031, UPC §2-101)

  • Myth #79: The Giselman v. Comm. Case: No Paperwork, No Gift—The IRS 'Clawed Back' Business Interests (IRC §2511)

  • Myth #80: The Estate of Thompson Case: "Common Sense" Won't Save Your Business from a Legal Freeze

  • Myth #81: The Estate of Fick Case: The Best Will Can't Fix a Title Mismatch (UPC §3-101)

  • Myth #82: The Estate of Littick Case: Probate Delays Can Lead to a Higher Tax on Your Stock Portfolio (IRC §2031)

  • Myth #83: The Estate of Steinberg Case: Your IP Needs a Trust, or It Will Get Frozen in Probate (IRC §2033)

18 HIGH-VALUE INVESTMENTS, DIGITAL ASSETS, STOCKS, AND ESTATE PLANNING MISTAKES

  • Myth #84: The Badgley v. United States Case: Dying During a GRAT Term Voids the Entire Plan (IRC §2036(a) (1))

  • Myth #85: The Estate of Petter v. Commissioner Case: How Defined-Value Clauses Made a Sale to an IDGT a Success (IRC §675(4) (C))

  • Myth #86: The Syndicated Easement Case: The IRS Is Disallowing Trusts and LLCs for Lacking Business Substance (IRC §§2703, 2036, 2038)

  • Myth #87: The Conservation Easement Case: Aggressive Easements Are Facing Massive IRS Penalties (IRC §170(h))

  • Myth #88: The CLAT Case: The IRS Ruled This Trust Invalid for Lacking "Economic Effect" (IRC §642(c))

  • Myth #89: The QPRT Case: If You Die During the Term, Your Home Is Right Back in Your Estate (IRC §2036(a) (1))

  • Myth #90: The Strangi Case: Layering FLPs and GRATs Together Can Increase Your Audit Risk (IRC §§2036, 2038, 2703, 2035)

  • Myth #91: The Valley Park Ranch LLC v. Commissioner Case: One Bad Clause Can Sink Your Entire Conservation Deduction (Treasury Reg. §1.170A-14(g) (6) (ii))

  • Myth #92: The Family Charitable Trust Case: Retaining Control Over Charity Powers Can Trigger Estate Inclusion (IRC §§2036, 2038, 674(b) (4))

  • Myth #93: The Estate of Elkins Jr. Case: Don't Count on Big Valuation Discounts for Fractional Interests (IRC §2031(b))

  • Myth #94: The Rothko Estate Case: Gallery Contracts and Misconduct Can Strip Control of Art from Heirs (IRC §2031)

  • Myth #95: The Bacon & Rothko Estates: A Will Is Not Sufficient for Valuables Like Art (UPC §3-101, IRC §2031)

  • Myth #96: The Reciprocal Trust Case: How Mirror SLATs Can Be a Legal Trap for Spouses (IRC §§2503, 2013, 2014)

  • Myth #97: The SLAT Case: Distributions to a Spouse Can Be Taxed Again in Their Estate (IRC §2035, §2511)

  • Myth #98: The Syndicated Easement Case: Aggressively Valued Easements Can Lead to IRS Penalties (IRC §170(h), §2031)

  • Myth #99: The Estate of Littick Case: Stocks Outside a Trust Are Not Safe from Probate (IRC §2031)

  • Myth #100: The Multi-State Property Case: Fractional Ownership Won't Save You from Multiple Probates

  • Myth #101: The Stacked Freeze Case: Combining Complex Trusts Can Invite IRS Scrutiny (IRC §§2036, 2038, 674, 170)

The stakes are high.

Small Moves Can Have Devastating Consequences. Don't Leave Your Wealth & Legacy Exposed.

Schedule a call to explore how the Mini Family Office System can help you detect and fix the hidden leaks and traps that can erode your hard-earned wealth.

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