Archive for the ‘ Estate & Gift Taxes ’ Category
Responsible Estate Planning
I like seeing estate planning related articles in major news sources. They usually confirm that the practices I preach have real-world application, and they usually explain things plainly. Two recent, short articles–one in The Washington Post and the other in The Wall Street Journal–both fit the bill. In The Washington Post, Rosalind Resnick (Axxess Business Consulting) wrote “The Parental [...]
Tax Free Gifts to Children
Gifts to children can be tax free through the use of a 2503(c) trust (also called a “children’s trust”). These trusts are named after the Internal Revenue Code section that makes these gifts free from taxation. A gift to any person is subject to federal gift taxation unless an exemption or credit applies. The most [...]
Florida Legislature to the Rescue!
A number of sources (including Forbes, most prominently) report that the Florida Legislature will take up a bill aimed at bringing sense to the chaotic 2010 estate tax gap. As I previously wrote (here), the one-year estate tax hiatus may cause many wills and trusts to produce gifting consequences that were never intended by the [...]
No Estate Tax? Think Again.
Much has been made about the fact that there is no Federal estate tax for individuals who die during 2010, but that doesn’t mean that the estate of a 2010 decedent escapes all taxes. The estate is liable for any deficit in Federal (and possibly state) income taxes for income earned by the decedent in [...]
CBS on 2010 Estate Tax
I’ve written a number of posts about the 2010 estate tax mess (most recently, here), but Deborah Jacobs at CBS MoneyWatch has done a nice job of providing the need-to-knows in her article “Estate Tax: What You Need to Know for 2010.” Particularly imporant is what Jacobs writes about formula clauses in wills and trusts, [...]
10 Things About Life Insurance Trusts
1. A Problem of Inclusiveness. The death benefits payable on life insurance that you own is included in calculating the value of your estate subject to Federal estate taxes. Even though you cannot spend the death benefits yourself, you control who will receive them, and that’s good enough for the IRS to tax them. 2. ILITs: Better [...]
New York Times’ Take on the Estate Tax
Yesterday’s editorial in the New York Times–“An Estate Tax Mess“–makes many of the same points as I tried to make in my post on December 24th. In particular, the editorial discusses the new hardship created by repeal of the step-up in basis on inherited property. It’s conclusion: “There will be many more losers than winners [...]
Death, Resurrection and Step-Up
It’s all but certain that Congress will fail to act by the end of the year to stave off the death (albeit briefly) of the Federal estate tax. Since 2001, we’ve been slowly plodding toward what most believed to be the easily avoidable 2010 hiatus and 2011 resurgence of the estate tax. Stated plainly, the [...]
Don’t Throw Away Your Family Trust Just Yet
One of the common features of proposals to reform the Federal estate tax is the idea that married couples should not need complicated estate planning, involving one or more trusts, to make full use of their estate tax exemption amounts. But Marc S. Bekerman points out that “exemption portability” may not eliminate common needs for trusts and [...]
Estate Tax Update
Last week’s Wall Street Journal included Laura Saunder’s good, concise article: Will the Estate Tax Disappear? The article is short and worth reading, but here are the points I find most important: • Elimination of step-up in basis at death–which is tied to elimination of the estate tax in 2010 under current law–would impact a [...]