STEP LATAM and North America News Digest wrap-up – June’s top stories

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It’s been a busy month in North America and the LATAM region as FATCA takes effect. Missed some of the developments during this crucial time? Welcome to the wrap-up of the top ten most popular stories in the STEP LATAM and North America online Digests throughout June. In case you missed them, here are the top STEP LATAM and North America News Digest stories most clicked by our readers.

FATCA: US expats left stranded in Mexico: As the first set of Foreign Account Tax Compliance Act (FATCA) compliance issues for banks worldwide is set to come into effect on July 1, 2014, Banamex USA have begun to send notices to all US citizens in Mexico alerting them that their accounts will be closed within 30 days.

IRS prepares more generous offshore amnesty for inadvertent non-compliers: The Internal Revenue Service has accepted that its voluntary offshore compliance programs have been too harsh on accidental non-compliers. It is about to offer residents and long-term expatriates with unreported offshore accounts a route to compliance without risking heavy penalties, provided their non-compliance was not deliberate.

Clintons using trusts to limit estate tax: Bill and Hillary Clinton are reportedly using financial planning strategies to help shield some of their assets from estate tax. According to Federal financial disclosures and local property records, they created residence trusts in 2010 and shifted ownership of their New York house into them in 2011.

FATCA hurts American expats, says Heritage Foundation: The United States Foreign Account Tax Compliance Act (FATCA) is hurting Americans living abroad, according to the Heritage Foundation. In a new report calling for reforms, the organization noted that FATCA is burdening Americans living overseas with “enormous financial and legal burdens” through increased compliance costs and denials of service from foreign banks that do not want to have to deal with the law. It added that the Act “granted the Internal Revenue Service (IRS) a new level of intrusiveness into the lives of Americans”.

White House announces legislation to capture beneficial ownership: The US administration has announced legislation forcing every company formed in any state to obtain a federal tax employee identification number, and allowing the Internal Revenue Service to collect information on its beneficial owners. If enacted it would be a ‘significant and helpful move to fight the illicit use of US shell companies,’ according to Jersey Finance.

Estate planners should not decline representation of their law partner’s family, says law firm: In Printz v Printz, the West Virginia Supreme Court of Appeals dealt with an undue influence accusation where one of the testators’ children was the long-time law partner of the drafter of the testators’ wills. According to law firm Bryan Cave, although preparing estate documents that benefit an estate planner’s law partners could result in estate litigation down the road, it should not be reason to decline the representation.

Born in the USA – Lawrence H Heller TEP: ‘My experience is that 99 per cent of US persons are tax-compliant. So I’d be interested to see statistics regarding what FATCA means in terms of increased revenue for the US Treasury,’ says Larry Heller TEP, attorney at Greenberg Traurig in Los Angeles and STEP Council member, in an interview for the STEP Journal.

New Brunswick judge voids will bequest to US white supremacist group: In a New Brunswick Court of Queen’s Bench ruling last week (McCorkill v Streed, Executor of the Estate of Harry Robert McCorkill), Justice William T Grant voided a will bequest gifting the testator’s entire estate to a US white supremacist group. The judge declared an intestacy after finding the National Alliance stands for principles and policies “that are both illegal and contrary to public policy in Canada.”

Changes to discretionary trust rules in British Columbia: Amendments to limit a spouse or common-law partner’s rights to certain trusts’ property in the event of a relationship breakdown were enacted into British Columbian law in late May 2014. This change may be good news for certain taxpayers who live in BC, including beneficiaries of a discretionary trust and parents who have set up a discretionary trust with their children as beneficiaries.

Senators plan comprehensive tax reform:  Senate Finance Committee Chairman Ron Wyden and Senator Orrin Hatch have agreed on a set of hearings this summer to spur movement toward comprehensive tax reform. In a joint statement, they said it is time to build momentum for tax reform by breaking the issue into smaller pieces. Their panel will hold hearings in June and July to build the foundation for a “modern, effective tax code.”

The STEP Industry News Digests provide a round-up of relevant industry news for trust and estate practitioners and other professionals in the wealth management sector. They provide brief summaries of topical news stories gathered from news providers internationally, providing a quick reference for busy practitioners to all the relevant news and issues. The News Digests also feature job listings from our recruitment site and list local STEP branch events and conferences. STEP’s digest services include twice weekly UK and Wealth Structuring (international) editions as well as a bi-weekly North America Digest focusing on the US, Canada and Mexico, and a Latin America Digest.

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