Wills, Trusts & Estates Prof Blog

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

Wednesday, June 21, 2017

New Edition of "McCouch's Federal Income Taxation of Estates, Trusts, and Beneficiaries in a Nutshell" Released

BookGrayson M.P. McCouch recently published a book entitled, McCouch's Federal Income Taxation of Estates, Trusts, and Beneficiaries in a Nutshell (2017). Provided below is a description of the book:

This comprehensive guide can serve either as a course supplement or as a refresher for members of the bar. Expert commentary summarizes the law and offers critical perspectives on the federal income taxation of estates, trusts, and beneficiaries, including the decedent’s final income tax return; classification of estates and trusts; income in respect of a decedent; distributable net income; simple and complex trusts; distributions; grantor trusts; charitable trusts; and foreign trusts. Additional chapters cover basic income, gift and estate tax concepts, accumulation distributions, and specially treated trusts.

June 21, 2017 in Books, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Trusts | Permalink | Comments (0)

Tuesday, June 20, 2017

Interview with Steven J. Oshins, Esq.

NingSteven J. Oshins, Esq., AEP (Distinguished) is an award-winning attorney practicing in Las Vegas, Nevada. He maintains clients throughout the United States. Oshins recently sat down for an in-depth interview covering a variety of topics. Part I of his interview considers the use of the Nevada Asset Protection Trust. Part II focuses on the Hybrid Nevada Asset Protection Trust, and Part III looks at the Nevada Incomplete Non-Grantor Trust. Part IV discusses Nevada Dynasty Trusts and reviews recent developments regarding these trusts.

See On Nevada Asset Protection and Trust Planning: A Conversation with Steven J. Oshins, Esq., AEP (Distinguished) Part III, First American Trust.

June 20, 2017 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Trusts | Permalink | Comments (0)

Monday, June 12, 2017

Why I Am Giving My Children Their Inheritance Now

BrownPaul B. Brown has worked for the super wealthy. His former employers include individuals that have owned toys ranging from his-and-hers 747s to luxury yachts with private submarines. In the years Brown spent working for people who spend many times more on their hobbies than he spends on his mortgage, Brown realized that he and his wife are definitely not part of this extremely restricted club of the ultra-affluent. But, Brown and his wife are relatively successful. Brown’s wife has a nationally recognized consulting business and Brown writes a book every decade or so that enjoy moderate success. The pair has put their four children through expensive private colleges and are now enjoying the extra discretionary income that comes with adult children that have all left the home. Having a bit of extra money, Brown and his wife did something unusual; they started giving their children their inheritances.

The impetus behind this decision considered a number of factors. One simple reason for the early gift was that their children needed the money. Buying new homes and having their own children placed Brown’s children in a position where they could use the extra funds to make down payments and fund college education. Brown wanted to help now, when he could spare the money and when his kids really needed the extra funds. Another consideration was the oddity of having children looking forward, even at some subconscious level, to receiving a windfall at Brown’s demise. Each of his children had varying reactions to the receipt of their early inheritance, but all accepted and used the money for their own unique needs. Brown says that he is not worried about how they use the money and remains content with the early provision.

See Paul B. Brown, Why I Am Giving My Children Their Inheritance Now, The New York Times, June 9, 2017.

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

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

June 12, 2017 in Estate Planning - Generally, Gift Tax | Permalink | Comments (0)

IRS Provides Simplified Method to Request an Extension of Time to Make a Portability Election

Irs shakedownOn Friday, the IRS issued taxpayer-friendly guidelines allowing certain estates to make a late portability election if they had previously failed to make a timely election (Rev. Proc. 2017-34). Portability elections allow surviving spouses to use a decedent’s unused exemption amount for estate and gift taxes purposes. Previously, the IRS provided a simplified method for obtaining an extension for filing, but that grieving-spouse-friendly method expired at the end of 2014. Since then, the regulations available for filing an extension have been onerous and time-consuming. The new method for filing an extension provided under Rev. Proc. 2017-34 demands much less time and effort.

See Sally P. Schreiber, IRS Provides Simplified Method to Request an Extension of Time to Make a Portability Election, Journal of Accountancy, June 9, 2017.

Special thanks to Jerome Borison (Professor at University of Denver Sturm College of Law) & Kevin Staker for bringing this article to my attention.

June 12, 2017 in Current Events, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax, New Legislation | Permalink | Comments (0)

Saturday, June 10, 2017

Article on A Tax Dead on Arrival: Classical Liberalism, Inheritance, and Social Mobility

ZzÅsbjørn Melkevik recently published an Article entitled, A Tax Dead on Arrival: Classical Liberalism, Inheritance, and Social Mobility, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

Historically, it is safe to say that very few laws did as much to stoke inequality as laws touching descents and hereditary transmissions. This paper attempts to see if the classical liberal tradition can endorse inheritance taxation so as to further fair equality of opportunity, as well as to lessen inequality of undeserved wealth. It argues that fair equality of opportunity is a necessary feature of market societies to make sure that they remain competitive. Hence, inheritance taxation is most likely necessary from a classical liberal point of view as an instrument of social mobility to counter notable problems of social immobility, say hereditary vocational stratification, which a system of private property rights creates.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

June 10, 2017 in Articles, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax | Permalink | Comments (0)

Wednesday, June 7, 2017

Who Controls How Voluntary Payments to IRS Are Applied?

IRSIn Estate of Beckenfeld v. Commissioner, the Tax Court held that a taxpayer can force the IRS to apply voluntary payments according to the taxpayers instructions. In this case, the IRS credited a husband’s estate with a payment clearly intended to apply to the wife’s estate. Part of the issue was that the check provided to the IRS was for the husband’s liabilities and included his social security information. The executor’s representative tried to argue that the husband’s estate was offering payment to satisfy the obligations of the wife’s estate. The instructions indicated that a check from the husband’s estate could only satisfy obligations arising from that estate.

See Kevin A. Diehl, Who Controls How Voluntary Payments to IRS Are Applied?, Wealth Management.com, June 1, 2017.

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

June 7, 2017 in Estate Administration, Estate Planning - Generally, Gift Tax, New Cases | Permalink | Comments (0)

Tuesday, June 6, 2017

Transfer Tax Rules for the Non-Citizen Spouse

KimTransferring wealth to a spouse that is not a citizen of the US can create complex tax challenges. An example, a resident alien domiciled in the US may have an estate that is subject to taxes in another nation in which he is a citizen. If the real estate is owned in a third jurisdiction, there may be even more taxes owed. Most countries have tax treaties that must be thoroughly examined at death and for certain taxable events. The provisions in these tax treaties are usually complex, but transfer tax planning for non-citizens cannot occur until all applicable treaties have been examined.

See Kimberly Stogner, Transfer Tax Rules for the Non-Citizen Spouse, Womble Carlyle, May 23, 2017.

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

June 6, 2017 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Trusts, Wills | Permalink | Comments (0)

Tuesday, May 23, 2017

Article on Transfer to Limited Partnership Includible in Estate

LLP1Lewis J. Saret recently posted an Abstract entitled, Est. of Nancy H. Powell: Transfer to Limited Partnership Includible in Estate, Wealth Strategies Journal (2017). Provided below is the abstract:

On August 8, 2008, D’s son, J, acting on her behalf, transferred cash and securities to LP, a limited partnership, in exchange for a 99% limited partner interest. LP’s partnership agreement allowed for the entity’s dissolution with the written consent of all partners. Also on August 8, 2008, J, purportedly acting under a power of attorney, transferred D’s LP interest to T, a charitable lead annuity trust, the terms of which provided an annuity to a charitable organization for the rest of D’s life. Upon D’s death, T’s corpus was to be divided equally between D’s two sons. D died on August 15, 2008.
Held: D’s ability, acting with LP’s other partners, to dissolve the partnership was a right “to designate the persons who shall possess or enjoy” the cash and securities transferred to LP “or the income therefrom”, within the meaning of I.R.C. sec. 2036(a)(2).

Held, further, because D’s LP interest was transferred, if at all, less than three years before her death, the value of the cash and securities transferred to LP is includible in the value of her gross estate to the extent required by either I.R.C. sec. 2036(a)(2) or I.R.C. sec. 2035(a).

Held, further, neither I.R.C. sec. 2036(a)(2) nor I.R.C. sec. 2035(a) (whichever applies) requires inclusion in the value of D’s gross estate of the full date-of-death value of the cash and securities transferred to LP; only the excess of that value over the value of the limited partner interest D received in return is includible in the value of D’s gross estate. I.R.C. sec. 2043(a).

Held, further, J’s transfer of D’s LP interest to T was either void or revocable under applicable State law because D’s power of attorney did not authorize J to make gifts in excess of the annual Federal gift tax exclusion; consequently, the value of the 99% limited partner interest in LP, as of the date of D’s death, is includible in the value of her gross estate under I.R.C. sec. 2033 or I.R.C. sec. 2038(a).

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

May 23, 2017 in Articles, Estate Planning - Generally, Estate Tax, Gift Tax, Trusts | Permalink | Comments (0)

Saturday, May 20, 2017

10 Tips for Tumultuous Tax Times

RK_Post_-_Death_and_Taxes_1024x1024The only things that ever seemed to be certain were the inevitability of death and the persistent and ever-present burden of taxes. Now, taxes are coming into question (sort of). President Trump and the Republican-dominated congress are expected to change the laws concerning estate and gift taxes. Unfortunately, for estate planners, neither the extent nor the scope of these changes are actually known. John O. McManus, founder of an estate planning firm in New York, has some helpful strategies to deal with the uncertainty. McManus’ friendly tips push flexibility in planning and he says these strategies work in both the long and short term, and are beneficial for the mass affluent as well as the ultra-wealthy.

See Karen Demasters, Fidgety About Tax Reform? Here Are 10 Things Estate Planners Can Do Now, Private Wealth, May 12, 2017.

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

May 20, 2017 in Current Events, Death Event Planning, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax | Permalink | Comments (0)

Thursday, May 18, 2017

ACTEC Annual Meeting Summary

CLEThe American College of Trust and Estate Council (ACTEC) is a nationwide organization consisting of nearly 2,600 lawyers. The central objective of the organization is to study and improve trust, estate and tax laws, procedures and professional responsibility. Recently, ACTEC held its annual meeting in Scottsdale, Arizona. A veritable oasis in the desert, Scottsdale is known for its spa resorts and expansive golf courses.

The topics covered at the annual meeting include:

  • Estate planning current developments over the last year
  • Trachtman lecture (by Hanson Reynolds) regarding end-of-life decisions
  • Planning Issues for S Corporations and C Corporations
  • Charitable bequests of retirement assets
  • Tips for estate and gift tax audits from trial lawyers' perspectives
  • Common reporting standard and FATCA
  • Community property in common law states
  • Trusts in divorce, and
  • Structuring settlement agreements

Steve R. Akers, Senior Fiduciary Counsel at Bessemer Trust, wrote a synopsis of his observations at the event. His musings can be found here.

May 18, 2017 in Conferences & CLE, Estate Planning - Generally, Estate Tax, Gift Tax, Trusts | Permalink | Comments (0)