Take-Away: The assets held in a safe deposit box on the death of a joint tenant were not treated as a lifetime gift by the decedent. Consequently, the contents of the box were part of the deceased tenant’s distributable estate, much to the surprise of the surviving joint tenant of the box. Background: Multiple elements […]

Take-Away: A spousal lifetime access trust, or SLAT, is a grantor trust for income tax reporting purposes. If each spouse creates a SLAT for their spouse, the settlor will continue to pay income taxes on the SLAT’s income. The fact that the SLATs are grantor trusts also means that the transfer of assets between the […]

Take-Away: There are principally four ways in which a non-taxable gift can occur. Gifts that use the donor’s federal gift tax exemption. Leveraged gifts. Gifts that use valuation discount strategies. And direct gifts to pay for tuition and medical expenses and annual exclusion gifts. Some of these gift strategies are more effective, or they carry […]

Take-Away: Some transfers of retirement account assets are not technically rollovers. Other transfers of retirement account balances do constitute rollovers, which subjects that transfer to many risks. Mistakes often occur when retirement account transfer rules get confused, which is easy to do when you consider the common use of the term rollover to describe any […]

Take-Away: With the currently large federal gift tax exemption amount ($11.4 million per person), there is arguably less concern with regard to getting the value of the gifted interest wrong and thus inadvertently triggering a federal gift tax liability. However,  if the federal gift tax exemption drops back to a lower amount, e.g. Bernie Sander’s […]

Take-Away: We know that elder financial abuse is on the rise. Some recent statistics and estimates are even more eye opening and probably compel discussions with older individuals of taking even more protective measures to prevent the potential financial abuse Definition: Elder fraud, also called elder financial abuse or elder financial exploitation, is defined as […]

Take-Away: We now have historically high federal estate and gift tax exemptions per individual, enhanced by a deceased spouse’s unused applicable exemption amount (the DSUEA.) However, these transfer tax exemptions are only temporary; they are set to expire on December 31, 2025. Unfortunately, those large amounts and the delayed expiration date are causing a dangerous […]

Take-Away: A below market interest rate charged on a loan, or a note given in exchange for the acquisition of an asset, is governed by the Tax Code. The Tax Code imposes some unusual assumptions for both the lender and the borrower. Background:  IRC 7872 went into effect in 1984. It provides that if a […]

Take-Away: Many estate planning transactions use debt or loans between family members or between related parties. The existence of a bona fide debt is critical to the effectiveness of the transaction. If the loan is not repaid, the question arises if the holder of the promissory note is entitled to claim a tax deduction for […]

Overview of Impact: 90% of all taxpayers will no longer itemize their income tax deductions; the number of itemizers will drop from 30 million to 5 million. Only 5% of taxpayers will have their state income tax deduction limited by the $10,000 per taxpayer state and local taxes (SALT) deductible amount. This dollar limit however […]