o Tax deferred exchanges: Like kind (1031) exchanges require that you swap property for replacement property. How long do you have to hold the replacement property to get the desired result? here is no safe harbor period. The issue is one of intent. Many cases have held that if the taxpayer intended at the time of the 1031 exchange to liuidate or dispose of the property acquired that the exchange won't be respected. If you 1031 exchange a commercial property for a rental house that will qualify as like kind. Subsequent behavior is used to determine intent at the time of the exchange. If a short period of time after the exchange you convert the former rental house into a personal residence you may taint the required intent at the time of the prior exchange. This is a fact sensitive issue. Did you have a contract signed before? How much time passed? Did you really rent the property after the exchange? Was it rented for an arm's length price to an unrelated person? Fact sensitive, no bright line rule. In Click V. Comer. 78 TC 225 (1982) as an example, the court held that holding the property for 7 months and then making a gift of the property demonstrated that the taxpayer did not have the required exchange intent at the time of the 1031.
o Property Insurance Review: When was the last time you had a check up? Mold coverage may be excluded or limited to a modest amount like $10,000, when a much higher limit might be advisable. Some homeowner policies limit contents coverage to a percentage of the structure's value or coverage. For many wealthy homeowners, these limits are inadequate. Scheduled property such as fine art and jewelry should be reviewed updated and appraised periodically. Does your policy provide identity theft coverage? Is your personal excess liability (umbrella) coverage adequate? Are vacation home, rental properties and other personal land holdings covered? Do they need to be listed separately? Have you coordinated business and personal coverage to avoid overlaps and gaps? If you are handling an estate or trust that owns property (trusts owning personal use assets such as houses and art are increasingly common) does the policy properly list and cover the trustees and executors?
o Divorce: If you are in the process of divorcing, a final conclusion can be a year or longer in the future. You need to update all of your estate planning documents to name persons other than your ex-spouse to be as agent. You may need to secure resignations of your ex-spouse's family as fiduciaries. Old powers of attorney and other documents need to be revoked. Weigh the cost of using a married filing separate tax status versus married filing joint. If the amounts are not too significant, it is better to begin the separation of tax filings earlier (if an audit occurs in 3 years the entanglements are often not worth the initial tax savings). If your parents are planning their estates they should evaluate limiting all bequests to you in lifetime discretionary trusts.
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