Wills, Trusts & Estates Prof Blog

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

Sunday, October 15, 2017

IRS Faulted on Scrutiny of Estate and Gift Tax Returns

DownloadIn a recent report, the Treasury Inspector General for Tax Administration (TIGTA) recommended that the IRS fix a number of current processes associated with review of estate and gift tax returns. TIGTA encouraged the IRS to strengthen its internal controls and suggested that it should revise the Internal Review Manual. IRS management agreed with all the recommendations and is planning on taking some action to fix the issues. TIGTA Inspector General J. Russell George stated, “Taxpayers must be treated fairly and consistently. The IRS must effectively process, select, and assign estate and gift tax return cases for examination and identify the overall compliance impact of the program.”

See Michael Cohn, IRS Faulted on Scrutiny of Estate and Gift Tax Returns, Accounting Today, September 28, 2017.

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

October 15, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Saturday, October 14, 2017

Most Successful Entrepreneurs Have Out-of-Date Estate Plans

Ky-slip-fall-lawyerEstate planning is essential for those wanting to reduce federal and state tax liabilities and to control the disposition of their assets after death. A survey of wealthy entrepreneurs revealed that nearly nine out of ten had some sort of estate plan in place. Even so, 85% of these estate plans were more than 5 years old. With tax laws continuously in flux, an older estate plan may mean missed tax savings or additional, previously unforeseen tax liabilities.

See Russ Alan Prince, Most Successful Entrepreneurs Have Out Of Date Estate Plans, Forbes, October 9, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

October 14, 2017 in Death Event Planning, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Thursday, October 12, 2017

Treasury To Withdraw Hated Estate Tax Valuation Rules

DownloadThe Treasury Department has concluded that rules affecting valuation discounts proposed during the Obama administration under Section 2704 are unworkable. The Treasury soon plans to publish a withdrawal of these proposed regulations. Richard Dees, an estate attorney, said that the proposed regulations “were mucking up an area that was already difficult to navigate.” However much clarification the withdrawn proposal offers for estate planners, this marks a small victory compared to the looming repeal of the estate and gift taxes.

See Ashlea Ebeling, Treasury To Withdraw Hated Estate Tax Valuation Rules, Forbes, October 4, 2017.

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

October 12, 2017 in Current Events, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Monday, October 9, 2017

Would Donald Trump’s Tax Plan Be a Bonanza for the Art World? An Analysis

4712306179621242The estate tax, along with divorce and outstanding debts, is among the more notable reasons for collectors to offer up their rare art masterpieces for sacrifice on the auction block. Ileana Sonnabend, a legendary art dealer who passed away in 2007, left bequests to family members that included works by Andy Warhol, Roy Lichtenstein, Cy Twomby, and Jeff Koons. Considered alone, the artwork left in the estate was valued at over $800 million. Closely behind these unique gifts stalked the tax man; Sonnabend’s heirs owed the federal government $331 million and New York State $140 million in taxes. This placed the family in an unpleasant position. Short on funds and heavy on illiquid assets, they were forced to sell a number of these masterpieces in order to satisfy their tax liabilities.

If the Trump administration’s tax plan makes it through Congress, it appears as though the estate tax would no longer be a concern. But, Ramsey Slugg, wealth strategist at U.S. Trust, notes that any repeal would probably be temporary. “The estate tax is kind of like a bad penny. It always comes back. It’s been repealed three or four times before, and it’s come back every time.”

See Eileen Kinsella, Would Donald Trump’s Tax Plan Be a Bonanza for the Art World? An Analysis, artnet news, October 2, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

October 9, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Saturday, October 7, 2017

CLE on Estate Administration Boot Camp

0000000 CLEThe National Business Institute is holding a conference entitled, Estate Administration Boot Camp, which will take place on Tuesday, October 10, 2017, at the Courtyard by Marriott San Luis Obispo in San Luis Obispo, CA. Provided below is a description of the event:

Program Description

Everything You Need to Know About Effectively Administering an Estate

Are you fully confident in your knowledge of the latest court and tax rules and the most effective transfer tools to ensure each client's estate is laid to rest according to the decedent's wishes, with minimal tax burden? This comprehensive 2-day instruction will give you all the skills you need to administer estates that include trusts and/or business interests without a hitch. Register today!

  • Don't miss any crucial notice and filing requirements when opening the estate - learn what must be done right away.
  • Get helpful forms and checklists that will help you in administration.
  • Understand how income and estate tax deductions interact and find the most advantageous way to structure the tax returns
  • Learn how to use disclaimers more effectively.
  • Clarify what must be done when the trust becomes irrevocable.
  • Protect your professional reputation with a practical legal ethics guide focused on trusts and estates practice.
  • Prevent mistakes in final petition and ensure each estate is closed quickly and without disputes.

Who Should Attend

This two-day, basic level seminar is designed for:

  • Attorneys
  • Accountants/CPAs
  • Certified Financial Planners
  • Trust Officers/Administrators/Managers
  • Paralegals

Course Content

DAY 1

  • Forms of Administration and When They are Used
  • First Steps and Notices, Executor Duties, Opening the Estate
  • Marshalling the Assets
  • Handling Debts and Claims Against the Estate
  • Spouse Elective Share and Disclaimers
  • Key Intestacy Laws You Must Know
  • Trusts That Affect Estate Administration

DAY 2

  • Income Tax Returns
  • Handling Distributions
  • Legal Ethics in Estate Administration
  • Estate and Trust Contests, Disputes, Challenges
  • Business Interests in Estate Administration
  • Portability and Estate, Gift, GST Taxes
  • Closing the Estate and Final Accounting

Continuing Education Credit

Continuing Legal Education – CLE: 12.00 *

International Association for Continuing Education Training – IACET: 1.20

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 14.00 *

* denotes specialty credits

October 7, 2017 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Intestate Succession, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Friday, October 6, 2017

Estate Tax Repeal Could Cost Charities, Attorney Says

Please-sir-may-I-have-some-moreThe estate tax is headed for the chopping block according to the most recent release of the Trump administration’s plan for tax reform. Those with over $5.49 million in assets are likely trembling with excitement at the mere possibility of avoiding the draconian 40% tax on their estates. Not everybody shares their excitement though. Robert Strauss, an estate planning attorney, points to the secondary consequences of the current estate tax regime. As it is, many of the ultra-wealthy provide substantial donations to charities in order receive deductions on the amount of estate tax paid. In 2010, when the estate tax was temporarily repealed, donations to charity fell by over four billion dollars from the prior year. Strauss believes that charities “are concerned that donations at the death of a benefactor will be reduced. Advisors need to think more carefully about how to advise their wealthy clients on donations because the rules may change this year.”

See Karen DeMasters, Estate Tax Repeal Could Cost Charities, Attorney Says, Financial Advisor, September 11, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

October 6, 2017 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

What Your Estate Planning Clients Should Do in Response To Trump's Tax Plan

37152The Trump administration’s plan for tax reform is far from unequivocal, and this ambiguity leaves estate planners in a difficult position. But while the future remains unknown, there are a few suggestions planners can offer clients to deal with uncertainty. The first critical step is to make sure estate plans maintain flexibility. Consider granting another individual an expanded power of attorney in order that he may make the necessary changes to the principle’s estate plan if tax reform brings about significant changes. In a similar vein, independent trustees of irrevocable trusts may be granted additional powers so they can act to reduce future tax exposure. Regardless of possible tax reform outcomes, estate planning will remain important to those wanting to distribute assets to children prior to death, as those assets will likely face gift tax consequences unless moved to a trust.

See Carol A. Harrington, Ellen K. Harrison, & Carlyn S. McCaffrey, What Your Estate Planning Clients Should Do in Response To Trump's Tax Plan, Financial Advisor, September 29, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) & Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

October 6, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax, Trusts | Permalink | Comments (0)

Thursday, October 5, 2017

What the Trump Tax Plan Means for Art Collectors and Dealers

1200px-David_Teniers_d._J._008The Trump Administration’s latest release of its proposed tax reform remains sparse on specifics, but the little that is known indicates possible implications for art-related businesses and art collectors. The most recent proposal would eliminate some currently-allowed itemized deductions, lower the number of tax brackets from seven to three, eliminate the estate tax, and change tax rates for smaller businesses.

A repeal of the 40% estate tax on estates valued at over $5.49 million would substantially change the manner in which many who own significant art collections or art pieces manage and distribute their estates. The absence of the 40% tax might encourage collectors to reconsider possible beneficiaries as there would be little need to accommodate paying the hefty tax on a highly illiquid asset. While the abrogation of the estate tax may appear to be all sunshine and open meadows, some are pointing to rain clouds on the horizon.

Under current law, beneficiaries receive a step-up in basis on art received through bequests, so capital gains earned by the original owner have no income tax implications for the beneficiary. Because the newest tax proposals do not seem to address this issue, there is some concern that beneficiaries may end up paying more in capital gains, which mitigates the substantial savings that would be earned with the removal of the estate tax.

See Anna Louie Sussman, What the Trump Tax Plan Means for Art Collectors and Dealers, Artsy, September 29, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

October 5, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Friday, September 29, 2017

Trump GOP Tax Reform Framework Calls for Estate Tax Repeal

Estate-tax-cartoonIn its current form, the federal estate tax applies to estates valued at over $5.49 million. The tax is considered draconian by many, as assets in excess of the $5.49 million threshold are subject to a 40% tax. Couples may combine their exemptions and are able to shield up to $11 million from the tax. The generation-skipping tax (GST) applies to transfers of wealth that pass over a generation during life or upon death. A grandmother giving a gift to a grandchild would be an example where the tax applies.

The Trump Administration’s most recent framework for tax reform includes proposals for repeal of the GST and the estate tax. The plan also calls for the repeal of the alternative minimum tax, the elimination of itemized deductions and personal exemptions, and reductions to the top individual and corporate tax rates. Though repeal and tax reform is far from a certainty, those opposed to the death tax are optimistic. The Family Business Coalition is “all in” for the repeal of the estate and GST taxes believing that their elimination would boost the economy and spur job creation.

See Ashlea Ebeling, Trump GOP Tax Reform Framework Calls for Estate Tax Repeal, Forbes, September 27, 2017.

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

September 29, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation | Permalink | Comments (0)

Thursday, September 28, 2017

Prince's 'Purple Rain' Handwritten Notes Hit Auction for Thousands!

0915-prince-shoes-records-notes-auction-photos-launch-3Prince was noted as being somewhat of a perfectionist. This trait is readily apparent in the many handwritten editing notes he added to “Purple Rain” and other songs. RR Auction is putting at least nine pages of these notes up for auction and is expecting them to sell for over $12,000.

See Prince's 'Purple Rain' Handwritten Notes Hit Auction for Thousands!, TMZ, September 18, 2017.

Special thanks to Molly Neace, J.D., for bringing this article to my attention. 

September 28, 2017 in Estate Administration, Estate Tax | Permalink | Comments (0)