PIF the Magic Dragon - Using Life Insurance and Pooled Income Funds to Preserve Retirement Benefits after the Secure Act – Part I

Gerald Nowotny
Contact

Gerald Nowotny - Law Office of Gerald R. Nowotny

Overview

For many years, the name of the game in retirement planning for income and estate tax purposes has been to maximize the tax deferral of qualified retirement and IRA accounts while preserving the ability to payout distributions over the longest period of time possible, i.e. the so-called Stretch IRA. Truth be told, the majority of wealthy taxpayers do not need and never did need these deferred compensation assets in order to maintain their lifestyle. The Stretch IRA was highly effective to say the least! Congress over the years has imposed a combination of income and estate taxes at death upon the death of the participant to minimize the benefit of tax deferral over multiple generations.

Finally, Congress delivered the knockout punch in the recently passed the SECURE Act. Most high net worth taxpayers, IRA accounts need to be paid out within ten years of the participant’s death with some exceptions applying. Most taxpayers given the opportunity would defer retirement plans until the end of time plus ten years.

Many indications point the taxpayer towards a conversion from a traditional IRA to a Roth IRA. However, the conversion does not come without some “bite” due to taxation on the lump sum distribution or alternatively, conversion over several years.

This article focuses on the ability to use a customized pooled income fund (“PIF”) as an alternative to the Roth conversion or alternatively charitable remainder trust. Why the PIF? This article focuses on the unique attributes of the PIF including the income deduction for the contribution which tends to be tw0-three times greater than the charitable remainder trust (“CRT”) which is an important consideration in our fact pattern.

Life After the SECURE Act

Under the SECURE Act, all retirement and IRA benefits will be required to be distributed within ten years of the participant’s death. The law allows for one exception for payments for Eligible Designated Beneficiaries – 1) The participant’s surviving spouse; 2) Persons with disabilities and chronic illnesses; 3) Minor children. Unfortunately, most trusts will fail to satisfy the requirements for minor children and disabled beneficiaries. Under the Act, the age to begin required minimum distributions is increased to Age 72. Unfortunately, the proposed changes also adversely impacts Roth IRAs. Benefits left to a non-spousal beneficiaries will be subject to the ten year payout requirement. If the beneficiary defers the income during that ten year period, all of the benefits become taxable at the end of the ten year period.

My 600 lbs. IRA

I admit that I am as equally perplexed as the next person as to how an IRA grows to $50 million or $100 million (Mitt Romney). I have heard of self-directed IRAs as high as $600 million. My theory is that it is not the magic of compound interest or disciplined monthly investment through dollar cost averaging, but rather a private equity investment that benefits from an initial public offering. If you move in the same circles as Richie Rich, you get presented many investment opportunities that don’t extend to the average investor.

Since most high net worth investors do not and never will need the money in their IRA account to live on, these IRA funds are “throw away” money to some extent. These funds get used to invest in start-up and private equity deals that high net worth investors do not need now or most likely in the future. On occasion these investments pay off. In some cases, it is more than once. When this occurs, the high net worth investor has a unique problem. The “throw away” money suddenly takes on new importance and represents a significant portion of the taxpayer’s net worth. However, these funds are like quicksand. The taxpayer cannot get out without the loss of most of the tax deferred income. On the one hand, the gains and reinvestment are tax deferred. However, the tax deferred gains on subject to income and estate taxation, a so-called double whammy (a tax term). The combination of these taxes can amount to 75-80 percent of the IRA account. The “stretch” in the Stretch IRA just lost its elasticity.

Example 1

Richie Rich, age 65, and a California resident, has a self-directed IRA worth $10 million. It used to be an ordinary self-directed IRA with $100,000 until Richie invested in the pre-IPO shares of Acme, Inc. which discovered the hunting trap for roadrunners. Richie invested $100,000 in these shares which subsequently went through an initial public offering. The shares rose to $10 million when Richie sold the shares within the IRA without gain. He has a taxable estate of $40 million. He is recently divorced and has three adult children. In the event of Richie’s death, he is facing the following tax erosion to his self-directed IRA without any planning:

Value Before Taxation

$10 million

Federal Estate Taxation

$4 million

Federal and State Taxation

$2.88 million

Total Taxes

$6.88 million

Balance to Heirs

$3.12 million

Planning Impact of a Roth Conversion

Richie Rich as the name implies is wealthy. He is currently in the highest marginal tax bracket in California and expects to remain in the highest federal and states marginal brackets moving forward. The conversion to the Roth offers a number of important benefits despite income taxation on the lump sum distribution from his self-directed IRA. For starters, the Roth IRA is not subject to require minimum distributions ate age 72. Distributions from the Roth IRA receive tax-free treatment providing distributions are made after age 59 ½ and the taxpayer has owned the Roth IRA for at least five years. Investment earnings within the Roth IRA receive tax deferred treatment. The Roth IRA is included in the taxpayer’s estate. If the Roth beneficiaries are not the taxpayer’s spouse, required minimum distributions must begin in the year following the taxpayer’s death.

Example 2

Richie Rich receives a tax-free distribution from his traditional IRA and pays the taxes on the distribution from an existing taxable investment account. The combined federal and California income taxes are $4.8 million. The pre-tax growth investment return assumption is 10 percent. The after-tax investment return assumption is 6 percent. Richie has a combined marginal tax rate of 48 percent. The Roth account is included in Richie’s taxable estate.

Summary

No Conversion

Conversion

Investment Balance –Yr 10

$22.33 million

$26.30 million

Investment Balance –Yr 20

$47.91 million

$67.91 million

Investment Balance –Yr 30

$93.67 million

$175.64 million

What is a Pooled Income Fund (PIF)?

Historically, pooled income funds have been the poor man’s version of the charitable remainder trust. Pooled income funds were regularly sponsored by larger public charities and have largely been wound down in recent years and eliminated as the charitable remainder trust proliferated in popularity. The Pooled Income Fund (PIF) that we are discussing is a customized version for the high net worth taxpayer and his family.

The magic of the customized PIF lies in the method used to calculate the value of the remainder interest which passes to a public charity at the death of the taxpayer and any additional income beneficiaries. If a pooled income fund has existed for less than three taxable years, the charity is able to use an interest rate in calculating the charitable deduction by first calculating the average annual Applicable Federal Midterm Rate (as described in IRC §75200 for each of the three taxable years preceding the year of the transfer. The highest annual rate is then reduced by one percent to produce the applicable rate. That rate has risen over the last several years to 2.2 percent for 2020 tax year.

A pooled income fund is a trust that is established and maintained by a public charity. The remainder interest of the PIF may be the taxpayer’s donor advised fund. The pooled income fund receives contributions from individual donors that are commingled for investment purposes within the fund. Each donor is assigned "units of participation" in the fund that are based on the relationship of their contribution to the overall value of the fund at the time of contribution.

Each year, the fund's entire net investment income is distributed to fund participants according to their units of participation. Income distributions are made to each participant for their lifetime, after which the portion of the fund assets attributable to the participant is severed from the fund and used by the charity for its charitable purposes. A pooled income fund could, therefore, also be described as a charitable remainder mutual fund.

Contributions to pooled income funds qualify for charitable income, gift, and estate tax deduction purposes. The donor's deduction is based on the discounted present value of the remainder interest. Donors can also avoid recognition of capital gain on the transfer of appreciated property to the fund.

IRC §642(c)(5) defines a pooled income fund as a trust:

  1. to which each donor transfers property, contributing an irrevocable remainder interest in such property to or for the use of a public charity while retaining an income interest for the life of one or more beneficiaries (living at the time of the transfer,
  2. in which the property transferred by each donor is commingled with property transferred by other donors who have made or make similar transfers,
  3. which cannot have investments in securities which are exempt from taxes imposed by this subtitle,
  4. which is maintained by the public charity to which the remainder interest is contributed and of which no donor or beneficiary of an income interest is a trustee, and
  5. from which each beneficiary of an income interest receives income, for each year for which he is entitled to receive the income interest determined by the rate of return earned by the trust for such year.

The trust instrument of the pooled income fund requires that property transferred to the fund by each donor be commingled with, and invested or reinvested with, other property transferred to the fund by other donors.

Community foundations and other public charities often receive contributions that are maintained for the benefit of other charitable organizations selected by the donor. A donor may designate the donor’s donor advised fund administered by the public charity as the recipient of the reminder interest.

Each beneficiary of a pooled income fund receives a pro rata share of the total rate of return earned by the fund for such taxable year. When a donor transfers property to a pooled income fund, one or more units of participation are assigned to the beneficiary or beneficiaries of the retained income interest. The number of units of participation assigned is obtained by dividing the fair market value of the property by the fair market value of a unit in the fund at the time of the transfer. Like a CRT, the PIF may make distributions on a monthly, quarterly or annual basis to meet the income requirements of the taxpayer.

Tax Benefits of PIFs

The taxpayer does not recognize gain or loss on the transfer of property to the PIF. In practice, this feature makes pooled income funds ideal for use by persons who desire to dispose of highly appreciated, low yielding property free of capital gains tax exposure in favor of assets that will produce higher amounts of cash flow. It is important to note the double tax leverage that can be accomplished by avoiding recognition of capital gain and creating an immediate charitable income tax deduction.

If a pooled income fund has existed for less than three taxable years, the charity is able to use an interest rate in calculating the charitable deduction by first calculating the average annual Applicable Federal Midterm Rate (as described in IRC §75200 for each of the three taxable years preceding the year of the transfer. The highest annual rate is then reduced by one percent to produce the applicable rate. That rate has risen over the last several years to 2.2 percent for 2020 tax year.

This interest rate provides a significantly larger deduction than a comparable contribution to a CRT. The following chart compares the percentage of deduction based upon a charitable deduction. The CRT assumes the minimum CRT payout of five percent for the taxpayer’s lifetime. Deductions for cash contributions are subject to the thirty percent of adjusted gross income threshold. Deductions of appreciated property are subject to the thirty percent of AGI threshold. The taxpayer may carryover excess deductions for an additional five tax years beyond the current year.

PIFs do not have a requirement to distribute at least five percent of the CRT’s fair maker value must be distributed each year. The PIF does not have a distribution requirement. In that respect, the PIF has a greater ability to mimic the stretch IRA by being able to accumulate income during periods where a distribution is not desired. Another key distinction is the tax treatment for cash contributions. A cash contribution to a CRT where the charitable remainderman is a public charity is limited to a deduction threshold of thirty percent of adjusted gross income (“ÄGI”). PIFs are not subject to thirty percent of AGI threshold. A cash contribution to a PIF is able to enjoy to the sixty percent of AGI for cash contributions to a public charity. As a result, a combination of the higher contribution deductions for PIFs versus the CRT and the higher deduction threshold, make the PIF, a stronger alternative to the CRT as an alternative to straight forward conversion to a Roth IRA.

The chart below compares the income tax deduction of a PIF to a CRT designed with the minimum five percent annual distribution. The IRC Sec 7520 rate is 2 percent. The interest rate for the newly created is 2.2 percent.

Age

Pooled Income Fund (%)

CRT (%)

40

44.7

17.8

45

49.1

25.1

50

53.9

26.6

55

58.9

32.1

60

64

38.3

65

69.2

45.1

70

74.3

50

75

79.3

60.3

80

83.8

67.9

85

87.8

74.9

Unlike charitable remainder trusts, which are conditionally exempt from income taxes, pooled income funds are, with one important exception discussed below, taxed as complex trusts. Pooled income funds seldom pay any tax, however, for several reasons. First, pooled income funds receive an unlimited deduction for all amounts of income distributed to fund participants. Because pooled income funds are required to distribute all income earned each year, there remains no income to be taxed.

Second, pooled income funds are permitted a special deduction for long-term capital gains that are set aside permanently for charity. In essence, long-term capital gains produced by a pooled income fund are allocated to principal. Because principal is earmarked for charity, such amounts escape income taxation. For purposes of tracking income and gain attributable to contributed assets, pooled income funds take on the donor's holding period and adjusted cost basis in the contributed property.

Nevertheless, the trust document for most pooled income funds defines income as that term is defined in IRC Sec 643(b). Under this section, the term income, when not preceded by the words taxable, distributable, undistributed net, or gross, means the amount of income of the trust for the taxable year determined under the terms of the governing instrument and local (state) law. The Uniform Income and Principal Act or Revised Uniform Income and Principal Act adopted by most states defines income to include interest, dividends, rents, and royalties. Unless otherwise defined, income does not ordinarily include capital gains. Provided that such definition is compatible with state law, however, pooled income funds can expand the definition of income to include capital gains. Pooled income fund beneficiaries are required to include in their gross income all amounts properly paid, credited, or required to be distributed to them during the taxable year or years of the fund ending within or with their taxable year.

Distributions from pooled income funds are taxed under the conduit theory applicable to IRC Sec 661 and 662. Because pooled income funds distribute all income earned during the taxable year, the tax character of amounts distributed to each income beneficiary is directly proportional to the tax character of investment income earned within the PIF. The taxpayer also receives a charitable deduction for gift tax purposes and the remainder interest is not included in the taxpayer’s taxable estate.

A Comparison of the Roth Conversion and the PIF – An Extended Example

An extended example using the same facts and assumptions as the prior examples may be the best method for determining the results. The extended example assumes a Roth conversion in 2020 and Richie Rich’s death in 18 years. The PIF assumes a plan design with Richie’s three children as the beneficiaries with successive lifetime incomes from the PIF, e.g. at Richie’s death, the PIF will continue for the lifetime of the three children. His children are respectively ages, 40, 38 and 35. Richie will design the investment strategy during his lifetime for growth. At his death, the PIF investment advisor will focus on a balanced strategy of growth and income. The growth rate during his lifetime is 8 percent. At his death, the portfolio assumption is 3 percent income and 5 percent growth. The income tax deduction is 33 percent of the initial contribution.

At Richie, death the Roth IRA is subject to certain distributions. Assuming the Roth IRA has been in effect for at least five years, the children have the option of taking a tax-free lump sum distribution or as a rollover to their own Roth IRA with distributions based on at least the required minimum distribution calculation over the beneficiary’s life expectancy.

  1. No Planning - At Richie’s death in the Year 2038, the projected value of the IRA is $21,899,000. The balance of the estate is projected to be worth $166,998,000. The projected income tax attributable to the IRA is $6,412,000 and federal estate tax attributable to the IRS is $12,044,000. The combined taxes amount to $21,900,000 which is approximately 84 percent of the total balance.

Alternatively, under the new SECURE Act rules, the IRA balance could be deferred for an additional ten years and distributed to Richie’s children. The projected balance at the end of Year 10 is $46,069,000. After distribution and taxation at a combined marginal tax rate of 48%, the balance remaining is $23,626,000.

  1. Roth Conversion in 2020

The conversion to the Roth IRA in 2020 assumes that the income tax liability for the lump sum distribution is paid from plan assets. The projected Roth IRA balances is $21,998,000. The projected balance at the time of Richie’s death in 2038 is $26,270,000. The Roth distribution requires required minimum distribution (RMD) in the year following death – 2039. The amount of tax-free distributions of the required minimum distribution amount from 2039-2070 is $149,020,000 tax-free.

  1. Pooled Income Fund

The conversion to the Roth IRA in 2020 assumes that income tax liability for the lump sum distribution is paid from other investment assets is paid from other investment assets and a contribution of $10 million is made to a newly formed pooled income fund (PIF). The PIF provides for successive beneficiary interests for his three children – 40,38, and 35. The PIF will incorporate a growth strategy assumed to be 8 percent until Richie’s assumed death in 2038. The projected value is $39, 960,000. After Richie’s death, the portfolio is switched to a balanced portfolio with a projected income of 5 percent and growth rate of 3 percent.

The projected account balance in 2038, Richie’s year of death is $152,601,000. At this point the portfolio is rebalanced to provide an income of 5 percent per year. The initial income split between the brothers is approximately $7,30,000. The projected income grows 3 percent per year. The projected account balance in in 2070 is $468,047,000. This amount will pass to Richie’s donor advised fund at the death of the last living beneficiary. Based on the investment assumptions, the projected income is $23,403,000 in 2070. The cumulative projected distribution of income to the beneficiaries, Richie’s three sons, is $405, 921,000 until the assumed death of the last surviving beneficiary in 2070.

An additional asset is the reinvestment of the tax savings from the PIF contribution in 2020. The tax savings are reinvested in a private placement life insurance policy insuring the lives of the two youngest sons. The projected tax deduction of $3,301,000 provides tax savings of $1,584,000 in 2020. The policy is a designed as a single premium modified endowment contract (MEC). The policy has a death benefit of $10 million initially and is designed to replace some of the assets passing to charity. The projected cash value in 2070 assuming an 8 percent growth rate is $46,660,000. The projected death benefit is $50,000,000.

Summary

The impact of the SECURE Act suggests that most planning that seeks to extend the “stretch” in the old Stretch IRA has merit. Depending on individual planning circumstances, a conversion to a Roth IRA rather that maintaining a taxable traditional IRA makes planning sense. This article suggests that additional tax planning such as incorporating a charitable tax planning strategy and life insurance to relocate assets in a more tax-favored manner. Charitable strategies have the ability to provide an offset on some of the income taxation on the initial lump sum distribution. The PIF provides a significantly larger income tax deduction than a CRT.

The tax deduction to the PIF may be used at the 60 percent of AGI threshold instead of the lower 30 percent AGI threshold for CRTs. The PIF has the ability to mimic most of the benefits of the CRT. The underlying investment strategy can regulate the amount of income payable to the income beneficiaries based on need. A taxpayer without a current need for additional income can defer the income payable for the income needs of younger beneficiaries to the future without any required minimum distributions.

The investment income within the PIF will be tax deferred. Current income is paid to income beneficiaries and tax deductible to the PIF and taxable to the beneficiary and recognized capital gains that are not part of trust income are added to the trust corpus that will ultimately be paid to charity.

The PIF has the ability to stretch out payment to selected beneficiaries over the beneficiaries’ lifetime without the imposition of required minimum distributions or a forced ten-year payout.

Ultimately the legacy left for charity will be the taxpayer’s greatest legacy - Tikunn Olam or repair the World or “On Earth as it is in Heaven.” We face many distractions and much wasted time in our journey through life. In the words of my Eastern German father (of blessed memory) frequently quoting the well-known German adage – “Too soon old, too late smart!” Let’s try harder to leave the World a better place, then when we first arrived!

Written by:

Gerald Nowotny
Contact
more
less

Law Office of Gerald R. Nowotny on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.