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Scott T. Ditman, CPA/PFS

Scott T. Ditman, CPA/PFS
Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.
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Recent Posts

T&E TALK: A Trust Can Fortify Your Assets Against Creditors

Posted by Scott T. Ditman, CPA/PFS on Aug 10, 2020 7:00:00 AM

You may think of trusts as estate planning tools — vehicles for reducing taxes after your death. While trusts certainly do fill that role, they’re also useful for protecting assets, both now and later. After all, the better protected your assets are, the more you’ll have to pass on to loved ones.

Creditors, former business partners, ex-spouses, “spendthrift” children and tax agencies can all pose risks. Here’s how trusts defend against asset protection challenges.

Tell Creditors “Hands off”

To protect assets, your trust must own them and be irrevocable. This means that you, as the grantor, generally can’t modify or terminate the trust after it has been established. (A “revocable trust,” on the other hand, allows the grantor to make modifications.) Once you transfer assets into an irrevocable trust, you’ve effectively removed your rights of ownership to the assets. Because the property is no longer yours, it’s unavailable to satisfy claims against you.

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Topics: T&E TALK

T&E TALK: Estate Planning for Your Digital Assets and Accounts

Posted by Scott T. Ditman, CPA/PFS on Aug 3, 2020 7:00:00 AM

Nearly everyone owns at least some digital assets, such as online bank and brokerage accounts, bill-paying services, cloud-based document storage, digital music collections, social media accounts, and domain names. But what happens to these assets when you die or if you become incapacitated?

The answer depends on several factors, including the terms of your service agreements with the custodians of digital assets, applicable laws and the terms of your estate plan. To reduce uncertainty, address your digital assets in your estate plan.

Pass on Passwords

The simplest way to provide your family, executor or trustee with access to your digital assets is to leave a list of accounts and login credentials in a safe deposit box or other secure location. The disadvantage of this approach is that you’ll need to revise the list every time you change your password or add a new account. For this reason, consider storing this information using password management software and providing the master password to your representatives.

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Topics: T&E TALK

T&E TALK: Avoid Pitfalls When Splitting Gifts with your Spouse

Posted by Scott T. Ditman, CPA/PFS on Jul 27, 2020 7:00:00 AM

The annual gift tax exclusion allows you to transfer up to $15,000 per beneficiary gift-tax-free for 2020, without tapping your lifetime gift and estate tax exemption. And you can double the exclusion to $30,000 per beneficiary if you elect to split the gifts with your spouse.

It’s important to understand the rules surrounding gift-splitting to avoid unintended — and potentially costly — consequences.

Understanding the Pitfalls

Common mistakes made when splitting gifts include:

Failing to make the election. To elect to split gifts, the donor must file a gift tax return and the nondonor must consent by checking a box on the return and signing it or, if a gift exceeds $30,000, filing his or her own gift tax return. Once you make the election, you must split all gifts to third parties for the year.

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Topics: T&E TALK

T&E TALK: Estate Planning if you have Adopted Children or Unadopted Stepchildren

Posted by Scott T. Ditman, CPA/PFS on Jul 20, 2020 7:00:00 AM

If you have adopted children or unadopted stepchildren, estate planning is critical to ensure that your property is distributed in the way you desire.

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T&E TALK: A CRT Can Benefit You and Your Favorite Charity

Posted by Scott T. Ditman, CPA/PFS on Jul 13, 2020 7:00:00 AM

Are you a multitasker? If so, you may appreciate an estate planning technique that can convert assets into a stream of lifetime income, provide a current tax deduction and leave the remainder to your favorite charity — all in one fell swoop. It’s the aptly named charitable remainder trust (CRT).

A CRT in Action

You can set up one of two CRT types: a charitable remainder annuity trust (CRAT) or a charitable remainder unitrust (CRUT) and fund it with assets you own. The trust then pays out income to the designated beneficiary or beneficiaries — for example, the trust creator or a spouse — for life or a term of 20 years or less. Alternatively, if certain requirements are met, you can choose to have income paid to your children, other family members or an entity.

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Topics: T&E TALK

T&E TALK: Business Succession and Estate Planning: It can be Complicated

Posted by Scott T. Ditman, CPA/PFS on Jul 6, 2020 7:00:00 AM

Transferring a family business to the next generation requires a delicate balancing act. Estate and succession planning strategies aren’t always compatible, and family members often have conflicting interests. By starting early and planning carefully, however, it’s possible to resolve these conflicts and transfer the business in a tax-efficient manner.

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T&E TALK: Concealing a Trust Could Run Afoul of State Law

Posted by Scott T. Ditman, CPA/PFS on Jun 29, 2020 7:00:00 AM

You may have good intentions in keeping a trust a secret from its beneficiaries. Perhaps you have concerns that, if your children or other beneficiaries know about the trust, they might set aside educational or career pursuits. Be aware, however, that the law in many states forbids this practice by requiring a trust’s trustee to disclose a certain amount of information about the trust to the beneficiaries.

Enforcing the Uniform Trust Code

The Uniform Trust Code (UTC), which now 34 states (and the District of Columbia) have adopted, requires a trustee to provide trust details to any qualified beneficiary who makes a request. The UTC also requires the trustee to notify all qualified beneficiaries of their rights to information about the trust.

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Topics: T&E TALK

T&E TALK: Should You “Park” Your Vehicle in a Living Trust?

Posted by Scott T. Ditman, CPA/PFS on Jun 22, 2020 7:00:00 AM

Using a revocable trust — sometimes referred to as a “living trust” — is a common estate planning strategy to manage one’s assets during life and to avoid probate at death. For the trust to be effective, you must “fund” it, meaning transferring ownership of your assets to the trust.

Perhaps you have collectible automobiles or other valuable vehicle types. Should you consider transferring them to your revocable trust? If you still owe money on an auto loan, the lender may not allow you to transfer the title to the trust. But even if you own the vehicle outright (whether you paid cash for it or a loan has been paid off), there are risks in making such a transfer.

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Topics: T&E TALK

T&E TALK: Estate Planning When Time is Short

Posted by Scott T. Ditman, CPA/PFS on Jun 15, 2020 7:00:00 AM

The COVID-19 pandemic has caused some people to contemplate their own mortality or that of a family member. For those whose life expectancies are short — because of COVID-19 or for any other reasons — estate planning can be difficult. But while money matters may be the last thing you want to think about when time is limited, a little planning can offer you and those you love some financial peace of mind.

Action Steps to Take

Here are some (but by no means all) of the steps you should take if you have a short life expectancy. These steps are also helpful if a loved one has been told that time is limited.

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Topics: T&E TALK

T&E TALK: A Spousal Lifetime Access Trust (SLAT) Can be your Financial Backup Plan

Posted by Scott T. Ditman, CPA/PFS on Jun 8, 2020 7:00:00 AM

Some of the most effective estate planning strategies involve setting up irrevocable trusts. For a trust to be deemed irrevocable, you, the grantor, lose all incidents of ownership of the trust’s assets. In other words, you’re effectively removing those assets from your taxable estate.

But what if you’re uncomfortable placing your assets beyond your control? What happens if your financial fortunes take a turn for the worse after you’ve irrevocably transferred a sizable portion of your wealth? This may be an especially pertinent question in light of the current economic downturn resulting from the COVID-19 pandemic.

If you’re married, and feel as though your marriage is strong, a spousal lifetime access trust (SLAT) allows you to obtain the benefits of an irrevocable trust while creating a financial backup plan.

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Topics: T&E TALK

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