Take-Away: Senator Bernie Sanders (Vermont), along with Senator Whitehouse (Rhode Island) filed a Bill on March 25 that would dramatically overhaul the nation’s tax laws and close what many describe as estate planning ‘loopholes.’ Background: Last year while on the campaign trail, Senator Sanders introduced a Bill called “For the 99 Percent Act.” This year’s […]

Take-Away: In something of a surprise, the IRS has never provided any direct advice on the tax consequences resulting from the division of a Roth IRA in a divorce. The best analogy for guidance is when a spouse inherits a deceased spouse’s Roth IRA. Background: There is a distinct lack of guidance with regard to […]

Take-Away: Last week Bernie’s Sander’s (Vermont) proposed a Bill, “For the 99.5 Percent Act.” This week (March 29) we have Senator Chris Van Hollen’s (Maryland) proposed Bill “Sensible Taxation and Equity Promotion Act of 2021.” Senator Van Hollen’s Bill would have an effective date of January 1, 2021. Summary: Senator Van Hollen’s Bill would make […]

Take-Away: It pays to use definitions in Wills and Trusts, especially when using words like spouse. Background: Some Wills and most Trusts are too long in the eyes of the testator or settlor. When the instrument of transfer contains several paragraphs of definitions, that only adds to the document’s length, and the frustration of the […]

Take Away: Even when a trust is irrevocable, for federal gift tax purposes it is possible that the transfers by the settlor to that irrevocable trust will be treated as incomplete, thus causing the value of the trust’s assets to be taxed in the settlor’s estate at death. Incomplete gifts have gained a lot of […]

Take-Away: The 2017 Tax Act dramatically change the tax implications of a divorce settlement. Adjusting to those new tax rules has become a challenge in structuring spousal trusts, since some of the existing rules went unchanged, like the spousal unity rule. Background: The 2017 Tax Act (the Act) made fundamental changes to the income tax […]

Take-Away: A week or so ago a short summary of Bernie Sander’s proposed Bill, “For the 99.5 Percent Act” was provided. Some of its proposals are covered in a bit more depth. Background: The proposed “For the 99.5 Percent Act” is clearly an effort to eliminate many conventional estate planning strategies and principles that have […]

Take-Away: If Senator Bernie Sander’s proposed For the 99.5 Percent Act is adopted, the amount of an individual’s gift tax exemption drops to $1. 0 million, and grantor trusts created or funded after the Bill becomes law will be included in the grantor’s taxable estate. These changes will dramatically impact existing irrevocable life insurance trusts […]

Take-Away: If Senator Bernie Sander’s proposed For the 99.5 Percent Act is adopted, the amount of an individual’s gift tax exemption drops to $1. 0 million, and grantor trusts created or funded after the Bill becomes law will be included in the grantor’s taxable estate. These changes will dramatically impact existing irrevocable life insurance trusts […]

Take-Away: Many tax attributes that an individual accumulates during lifetime from certain assets or transactions end with the individual’s death. While the assets that created the income tax attribution are inherited by the deceased individual’s beneficiaries, the tax attributes that arise from those assets do not. Hence the need to plan to preserve tax attributes. […]