Tag Archives: estate planning

House Passes $56 Billion “Tax Extenders” Bill

The House, on May 29, by a vote of 215-204, approved a $56 billion tax bill, the “American Jobs and Closing Tax Loopholes Act”. The Senate has already approved a similar measure. President Obama is expected to sign the bill. … Continue reading

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New Carryover Basis Rules

Prior to 2010, property acquired from a decedent generally received a stepped-up basis under IRC § 1014. The purpose of the statute is to avoid the double taxation that would result if the asset were first subject to estate tax … Continue reading

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Life Insurance Trusts

Life insurance trusts have long assumed a position of importance in estate planning, especially for larger estates, since insurance proceeds may be excluded from the settlor’s gross estate, thereby reducing or eliminating estate taxes. These tax savings may be achieved if the trust is drafted to authorize (but not require) the trustee to purchase assets from, or loan money to, the estate. Continue reading

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Asset Protection Seminar: July 27, 2010 in Lake Success, NY

Download Seminar Invitation:  Asset Protection Seminar Invitation I would like to register for the July 27, 2010 Asset Protection Seminar:

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INSTALLMENT SALES OF ASSETS TO GRANTOR TRUSTS

Installment sales of assets to irrevocable grantor trusts is one of the most powerful estate planning techniques available today. Sales to “intentionally defective” irrevocable grantor trusts capitalize on different definitions of “transfer” for income and transfer tax purposes. Following such a sale, the grantor reports income tax on trust income. However, the grantor no longer owns the assets for gift and estate tax purposes. Therefore, the trust assets (and appreciation) will be removed from the grantor’s gross estate. Assets sold to the trust may consist of stock in a closely held business, real estate, marketable securities, or limited partnership interests. The trust may even hold S Corporation stock without jeopardizing the election. Continue reading

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2009 Gift & Estate Tax Decisions of Note

2009 Gift & Estate Tax Decisions of Note

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Estate Planning Synopsis

The level of sophistication of estate plans varies with the size and complexity of an individual’s estate. A carefully drafted Will or revocable inter vivos trust is the starting point for many estate plans. Continue reading

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Requirement of Filing Federal Gift Tax Return

The requirement of filing a federal gift tax return arises when one has made a completed taxable gift. Incomplete gifts do not impose any gift tax filing requirement. Thus, the donor’s gift of a diamond ring would exemplify a completed gift. However, if the donor reserved the power to revest beneficial title in the ring to himself at a later date, the gift would be incomplete.
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The IRC § 2036 Trap in Planning With FLPs & Grantor Trusts

Printer-friendly PDF Memorandum:  The IRC § 2036 Trap in Planning With FLPs & Grantor Trusts.wpd The IRS has advanced many theories to challenge the gift and estate tax savings occasioned by the use of family entities and grantor trusts in … Continue reading

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FAMILY DISCOUNT ENTITIES: INCOME TAX CONSIDERATIONS

FLPs (and LLCs) are ideal holding entities for family assets since fractional discounts yield substantial transfer tax savings. While the income tax treatment of asset transfers to and from these “flow thru” entities is generally placid, income tax planning should not be relegated to a mere afterthought. Continue reading

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Anticipating IRS Challenges to FLPs and FLLCs

Possessed of favorable tax attributes and tremendous flexibility, family limited partnerships (FLPs) and family limited liability companies (FLLCs) have proliferated over the past decade and have become an integral part of many estate plans. They can be used to manage a family business, to implement a plan of family succession and can even serve as extremely effective testamentary instruments. Recognized as separate legal entities, FLPs and FLLCs also accomplish formidable asset protection objectives. Continue reading

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Qualified Personal Residence Trusts (QPRTs)

In essence, a QPRT is formed when a grantor transfers a personal residence (and some cash for expenses) into a residence trust, and retains the right to live in the residence for a term of years. If the grantor dies before the end of the trust term, the trust assets are returned to the grantor’s estate, and pass under the terms of the grantor’s will. However, if the grantor outlives the trust term, the residence passes to named beneficiaries without any gift or estate tax event. Continue reading

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Life Insurance Trusts

Life insurance can be an invaluable estate planning tool. It can provide a broad measure of financial security for loved ones as well as provide the liquidity necessary to meet tax and other estate settlement obligations. Ownership of a life … Continue reading

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Marital Deduction Trusts

Property passing by bequest outright to a surviving spouse qualifies for the unlimited marital deduction. Property placed in trust for the surviving spouse may, depending upon the trust language, also qualify for the marital deduction. However, Code Sec. 2056(b) provides that a bequest to a surviving spouse will not qualify for the deduction where the interest passing to the surviving spouse will “terminate or fail.” Terminable interests are generally those which enable a person other than the surviving spouse to possess or enjoy any part of the property after a lapse of time or the occurrence of an event, such as the surviving spouse’s remarriage. Continue reading

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Tax News & Comment — March 2010

Tax News & Comment — March 2010

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