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Ada Clapp, J.D.

Ada Clapp, J.D.
Ada Clapp is a Berdon LLP Senior Principal with more than 25 years of experience, as a trusts and estates attorney, wealth strategist, and family office general counsel, advising high net worth individuals, fiduciaries, and family offices on a wide variety of matters. She has extensive experience advising on sophisticated income, gift and estate tax planning, philanthropy, fiduciary advisory and trust administration, family governance and family office operations.
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Recent Posts

T&E TALK: The Executor’s Role

Posted by Ada Clapp, J.D. on Nov 9, 2020 7:00:00 AM

If you have been named as an executor (or if you are choosing your own executor) it is important to understand the duties and responsibilities of this role. Today’s blog provides a broad overview of the process and responsibilities of estate administration. You should also understand that administering an estate responsibly requires a wide variety of skills including administrative, investment, legal, and accounting expertise. While you may not possess all of these skills, you should know that you may retain outside advisors to help you perform this complex role.

Overview of Executor’s Duties and Stages of Estate Administration

The role of an executor is to wind up the affairs of a decedent, collect the assets belonging to the decedent, satisfy the decedent’s claims, and distribute to the decedent’s beneficiaries the assets remaining after estate settlement. The course of the administration of a decedent's estate usually passes through a number of distinct stages:

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Topics: T&E TALK

T&E TALK: A Fiduciary Roadmap

Posted by Ada Clapp, J.D. on Oct 12, 2020 7:00:00 AM

If you are like most people, your life is complicated. There are a lot of moving parts, a lot of puzzle pieces. If you sometimes find it challenging to manage your own affairs just imagine how difficult it would be for your executor, guardian, or attorney-in-fact to do so. These “fiduciary” roles are often assigned to family members or close friends who have little or no information about your assets, your testamentary plan or the legal documents you have in place. The kindest and most responsible thing you can do for your loved ones is to leave them “a fiduciary roadmap” to help them find those puzzle pieces.  

What is a Fiduciary Roadmap?

In order for your guardian or attorney-in-fact to manage your financial affairs should you become incapacitated, or for your executor to administer your estate upon your death, they will need knowledge of your assets and the ability to access certain legal documents. A fiduciary roadmap is something you leave your fiduciaries to help them do this. Because this is a highly personal process, the roadmap can take many forms and be provided in many different formats. To prepare a fiduciary roadmap, you will first need to get organized.

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Topics: T&E TALK

T&E TALK: The Pros and Cons of Lifetime Gifts

Posted by Ada Clapp, J.D. on Sep 29, 2020 9:30:00 AM

In my last post, I alerted you to the fact that the federal gift and estate tax exemptions— now at a record high of $11.58 million per individual for 2020--would revert back to $5 million per individual (adjusted for inflation) in 2026 and could be cut back much sooner and more dramatically depending upon the results of this year’s election. I urged you not to postpone making lifetime gifts to use up the increased amount.  As a follow-up, I thought I should lay out some of the pros and cons of making lifetime gifts.

Pros: Advantages of Lifetime Gifts

One advantage of lifetime gifts is that a regular program of lifetime gifting can substantially reduce your estate tax bill. A current gift of property likely to increase in value during your lifetime not only removes the property from your estate but also removes all post-gift appreciation. If the gift is within your available Federal gift tax exemption— you will have passed all of this value to your children transfer tax free.

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Topics: T&E TALK

T&E TALK: Planning with the Increased Exemption Amounts, While they Last…

Posted by Ada Clapp, J.D. on Sep 14, 2020 7:00:00 AM

The federal gift, estate, and generation-skipping transfer (“GST”) tax exemptions are currently at an all-time high of $11.58 million per individual for 2020 ($23.16 million for a married couple).   However, these increased exemption amounts won’t be around forever, so if you want to preserve the current $11.58 million, you would be wise to use your gift and GST tax exemptions in 2020.

Increased Federal Exemptions Are Temporary

The federal gift and estate tax exemptions allow an individual to make lifetime gifts or transfers at death (that would not otherwise qualify for a marital or charitable deduction or an exclusion—and so would be taxable) up to the exemption amount free of gift or estate tax.   The two exemptions are “unified”; which means that any part of the $11.58 million exemption used to shelter lifetime gifts from gift tax reduces the amount available to shelter death-time transfer from estate tax.

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Topics: T&E TALK

T&E TALK: Estate Planning and Divorce

Posted by Ada Clapp, J.D. on Sep 8, 2020 7:00:00 AM

If you’re going through a divorce, you probably feel overwhelmed. Not only is it a difficult time emotionally, but there are a lot of legal and financial decisions you have to make to terminate your marriage.  Chances are you are not thinking about your estate planning—but you really should be. Here’s why:

Every person going through a divorce needs all of his or her estate planning documents reviewed, first when the divorce is commenced and again after the divorce is finalized. In addition, during negotiations, thought should be given to the estate or gift tax implications of proposed settlement obligations.

Wills and Trusts

To start, you should immediately review your will and revocable trust (collectively your “Will”). Under the laws of some states, bequests or fiduciary appointments (e.g., executor or trustee appointments) under a Will in favor of a former spouse are automatically revoked upon divorce. However, not all states provide for such revocation.

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Topics: T&E TALK

T&E TALK: Five Good Reasons to Turn Down an Inheritance

Posted by Ada Clapp, J.D. on Aug 31, 2020 7:00:00 AM

A loved one has just left you a bequestbut should you accept it?  You are now in the unique position of doing what is called “post mortem” planning.If you don’t need the assets, or there are tax savings or other advantages to be gained, it may make sense for you to refuse thebequest.You would do this via a qualified disclaimer. A qualified disclaimerallows the bequest to bypass you and go to the next beneficiary in line. There are many reasons why you might want to disclaim a bequest-- here are five:

  1. Estate and Gift Tax SavingsThis is often cited as the main incentive for using a qualified disclaimer. In 2020, an individual can shelter a generous $11.58 million in assets from gift and estate tax. By maximizing portability of a spouse’sunused estate tax exemption, a married couple can effectively pass up to $23.16 million in 2020 to their heirs free of gift and estate taxes. The gift and estate tax exemption may be used to shelter transfers to non-spouse beneficiaries, such as your children and grandchildren, from gift or estate tax (transfers between spouses are sheltered by the unlimited marital deduction).
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Topics: T&E TALK

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