It’s that time of the year when our attention turns to income taxes and we renew our annual search for ways to minimize the amounts that we must pay in income taxes, if not now, in future years. That same search applies to trustees of irrevocable trusts. Problem: We all know that irrevocable trusts are […]

I chuckled this morning when Wendy described the Heckerling Institute speaker’s description of a Durable Power of Attorney as creating a “license to steal.” Sadly, for the most part I agree with that generalization. Most parents are unwilling to view their child, or grandchild named as their agent under a Durable Power of Attorney, as […]

There is a lot of uncertainty these days that surround the ability of a  client to claim valuation discounts for transfers  in a family setting due to the IRS’s proposed IRC 2704 Regulations. Some commentators claim that these proposed valuation Regulations that greatly impact valuation discounts when entity interests [e.g. corporate stock, limited partnership interests, […]

There has been, and there will continue to be over the next several months, much discussion and prognostication with regard to the repeal of the federal estate tax and the impact of that repeal on estate planning as we know it. But before we get too far ahead of ourselves, we need a bit of […]

I recently read that a part of Speaker Ryan’s proposed income tax law changes would be the elimination of many income tax deductions. One deduction that his proposal eliminates is the IRC 691(c) deduction for federal estate taxes that were imposed on a decedent’s retirement assets, e.g. IRAs, 401(k) plans. The purpose of IRC 691(c) […]

Take-Away Message: Married couples should strongly consider adopting  spousal lifetime access trusts at this time as a ‘hedged’ planning strategy while they await possible change in the federal transfer tax laws. Context: Over the past couple of months I must have read over 15 articles in estate planning journals that address the question what to […]

Basic RMD Rules: If a spouse inherits an IRA from a spouse who died after his required beginning date [which is April 1 of the year that follows the year in which he attained age 70 ½] the inheriting spouse [let’s call her wife or the survivor] must take the required minimum distribution [RMD] for […]

Take-Away Message: When clients name a child as the sole trustee of an irrevocable trust for that child’s benefit, there is a risk that creditors will be able to claim the trust assets, even if the trust contains an ascertainable standard for distributions and a spendthrift or anti-alienation clause. Background Assumption: We often encounter irrevocable […]

At this morning’s TRO meeting Melinda mentioned the benefits of using a Transfer-on-Death (TOD) beneficiary designation for some clients, particularly to name a client’s trust as the designated beneficiary of an investment account. As I have mentioned in the past, I often encouraged married clients who held separate investment accounts to continue to maintain their […]

With the uncertainty that surrounds the possibility of tax law changes by Congress this year, what advice can an advisor provide to their clients when it comes to estate planning? We are left wondering if there will be a federal estate tax, a federal generation skipping transfer tax, a federal gift tax,  a ‘step-up’ (or […]