Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Monday, April 27, 2015

Minnesota Considering Estate Tax Change

Tax CutA big change may be coming to the Minnesota estate tax. Currently, the state's estate tax exemption is set at $1.4 million and will increase to $2 million by 2018. A House bill being considered by Minnesota lawmakers would accelerate the jump to the $2 million exemption to make it happen this year, and bump the scheduled 2018 exemption up to $5 million. Additionally, the bill would change the tax rate from a 9 to 16 percent range, to a flat 16 percent rate.

See Tim Pugmire, Minnesota Lawmakers Poised To Limit Reach Of Estate Tax, Waseca County News, Apr. 23, 2015.

April 27, 2015 in Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Saturday, April 25, 2015

Argument Against the Estate Tax From Family Farmers

FarmAn argument for repealing the U.S. estate tax is coming from owners of family farms and their family members. One family farmer made a plea against the estate tax while the bill to repeal it was being considered by the House Ways and Means Committee. The farmer shared his story of his father-in-law having to sell portions of his farm to cover the estate tax bill he faced after inheriting the family farm. According to the farmer, he could be put in the same situation in the future. Family farms make up 97% of U.S. farms and two-thirds of farms are owned by individuals age 55 and older.

See Mark Koba, Is the Death Tax Killing American Family Farms?, Fortune, Apr. 13, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 25, 2015 in Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Thursday, April 23, 2015

How Robin Williams is Protecting His Image After Death

Robin_WilliamsRobin Williams avoided a common problem with celebrity estates by including his publicity rights in his estate planning. Williams transferred his publicity rights to a charitable organization, the Windfall Foundation. This move not only provides protection of how Williams' personal brand is treated after his death, but also avoids the value of his publicity rights being included in his taxable estate.

See Gerard Cukier & Sameena Munir, What Can Robin Williams Teach You About Managing Your Personal Brand?, Music Week, Apr. 22, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

April 23, 2015 in Estate Planning - Generally, Estate Tax, Film | Permalink | Comments (0) | TrackBack (0)

Friday, April 17, 2015

House of Representatives Votes to Repeal Estate Tax

The CapitolIn what could be a massive shift in tax law, the US House voted to repeal the estate tax 240-179 with significant Republican support. The change would result in the total abolishment of the tax and preserve the stepped up basis rule which is already in the code. However, this bill will face significant opposition both in the Senate and with President Obama who has already indicated he does not agree with the change. No matter what ultimately happens, this act will certainly bring out the political big guns in the foreseeable future.

See Ashlea Ebeling, House Votes 240-179 To Repeal Estate Tax, Forbes, Apr. 16, 2015.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

April 17, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Income Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Thursday, April 16, 2015

PLRs Approve Beneficiary of GST-Exempt Trust Transactions

Gavel2In four similar Private Letter Rulings, the Internal Revenue Service determined that the proposed sale by two trusts of farmland to a beneficiary would not cause either trust to lose its Generation Skipping Transfer Tax exempt status, nor would it trigger any gift tax or estate tax consequences.  The practical effect of these rulings would “secure a commitment from IRS in advance of closing that it would not later assert the farm had been undervalued.”

See Four More PLRs Approve Transaction with Beneficiary of GST-Exempt Trusts, Charitable Planning, Apr. 13, 2015.

April 16, 2015 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, New Cases, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 15, 2015

Ten Reasons to Repeal the Estate Tax

Tax CutAs I have previously discussed, an estate tax repeal bill is being considered by the House. Here are 10 reasons given by a proponent of the bill for ending the estate tax:

  1. The estate tax is unfair.
  2. It is unpopular.
  3. Revenue generated is extremely low.
  4. The revenue generated is decreasing.
  5. It affects family start ups and not the uber-rich.
  6. The majority of states do not have an estate tax.
  7. The U.S. estate tax rate is one the highest in the world.
  8. It negatively impacts the job market.
  9. It reduces economic growth.
  10. It negatively impacts the environment by forcing landowners to subdivide tracts.

See Ryan Ellis Top Ten Reasons The U.S. House Will Kill The Death Tax, Forbes, Apr. 14, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 15, 2015 in Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 14, 2015

U.S. Estate Tax Consequences for Canadians

CanadaU.S. estate tax is not only a hot topic in the states, but also in Canada. Canadians that own U.S. real property could be facing U.S. estate  tax consequences. However, there may be some relief for these property owners under the Canada-U.S. Tax Treaty, which provides a prorated exemption amount based on the amount of U.S. owned property and overall assets. The treaty may also allow for a tax credit towards Canadian or U.S. income tax for the amount paid in U.S. estate tax.

See Samantha Prasad, Canada: How Snowbirds Can Avoid U.S. Estate-Tax Traps, Mondaq, Apr. 10, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 14, 2015 in Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Saturday, April 11, 2015

Criticisms Raised Against Double Death Tax Proposal

TaxesThe potential Estate Tax repeal is garnering much attention. Companion legislation is making its way through both the House and Senate that would repeal the estate tax. This move has raised additional criticisms of the President's proposal to increase capital gains taxes and make death a taxable event for capital gains tax purposes. Critics point to the financial burden that will be imposed on family businesses by imposing a second death tax, or double death tax, if the estate tax is not repealed and the proposed capital gains changes are passed.

See Tyler Deaton, Obama’s Double Death Tax, Roll Call, Apr. 9, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 11, 2015 in Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Friday, April 10, 2015

CBO Warns Estate Tax Repeal Will Add Billions to the Federal Deficit

EmptyAs I have previously discussed, an estate tax repeal bill passed the House Ways and Means Committee in March. As the Republican backed bill receives consideration by the House, the nonpartisan Congressional Budget Office (CBO) has expressed that if passed the estate tax repeal would create an additional $270 billion in federal debt over the next ten years.

See Rebecca Shabad, GOP Estate Tax Repeal Would Add $269B to Deficits, CBO Says, The Hill, Apr. 8, 2015. 

Special thanks to Jim Hillhouse for bringing this article to my attention.

April 10, 2015 in Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Saturday, April 4, 2015

Article on the Burden of the Estate Tax

Ray D. MadoffRay D. Madoff (Boston College Law School) recently published an article entitled, Written Testimony of Ray D. Madoff Before the Select Revenue Measures Subcommittee Hearing on the Burden of the Estate Tax on Family Businesses and Farms, Boston College Law School Legal Studies Research Paper No. 356 (2015).  Provided below is the abstract from SSRN:

Congressional testimony focusing on (1) the importance of the estate tax, particularly in supporting the fairness of our tax system and (2) the significant societal costs that would result from repeal of the estate tax.

In one form or another, the estate tax has been with us since this country’s earliest days. The first estate tax was enacted in 1797, long before the income tax. Our modern estate tax was enacted in 1916, a mere three years after the enactment of the income tax. Any tax that has stood the test of time for so long should not be repealed without due attention to the role that it plays in our society, and the negative repercussions that could result from its repeal.

April 4, 2015 in Articles, Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)