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Daily Archives: March 28, 2010
Use of Disclaimers in Pre and Post-Mortem Estate Planning
Disclaimers can be extremely useful in estate planning. A person who disclaims property is treated as never having received the property for gift, estate or income tax purposes. This is significant, since the actual receipt of the same property followed by a gratuitous transfer would result in a taxable gift. Although Wills frequently contain express language advising a beneficiary of a right to disclaim, such language is gratuitous, since a beneficiary may always disclaim.
For a disclaimer to achieve the intended federal tax result, it must constitute a qualified disclaimer under IRC §2518. If the disclaimer is not a qualified disclaimer, the disclaimant is treated as having received the property and then having made a taxable gift. Treas. Regs. §25.2518-1(b). Under the EPTL, as well as under most states’ laws, the person disclaiming is treated as if he had predeceased the donor, or died before the date on which the transfer creating the interest was made. Neither New York nor Florida is among the ten states which have adopted the Uniform Disclaimer of Property Interests Act (UDPIA). Continue reading
Posted in Disclaimers, Estate Planning, Post Mortem Estate Planning, Post Mortem Estate Planning
Tagged accepence of benefits, charitable disclaimers, credit shelter trust, disclaim within 9 months, disclaimant, disclaimer of fiduciary powers, disclaimers, disclaimers by infants, disclaiming applicable exclusion amount, disclaiming jointly owned property, EPTL 2-11(b)(2), exercise of general power of appointment, general power of appointment, interest passing without direction, IRC 2518, marital disclaimers, minors and incompetents, QTIP election, qualified disclaimers, separate and severable interests, surviving spouse
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NYS Department of Taxation and Finance Announces It Will Allow Separate QTIP Election
In certain cases, an estate is required to file a return for New York State estate tax but is not required to file a federal return. This may occur if there is no federal estate tax in effect on the decedent’s date of death or if the decedent died while the federal estate tax was in effect but the value of his or her gross estate was too low to require the filing of a federal estate tax return. In either instance, and if applicable, the estate may still elect to take a marital deduction for Qualified Terminal Interest Property (QTIP) on a pro-forma federal estate tax return that is attached to the New York State estate tax return. Continue reading
