Take-Away: If an individual possesses and incident of ownership in life insurance at the time of his/her death, the full death benefit will be included in the individual’s taxable estate for federal estate taxation. Incident of ownership is more than just owning the life insurance on one’s life. Background: Death benefits owned by the insured  […]

Take-Away: Creditors sometimes seek to set aside transfers by a settlor to an irrevocable trust claiming that the transfer of assets to the trust is a fraudulent conveyance. Courts have on occasion resorted to a couple of equitable remedies called either (i) the trust is the alter ego of the settlor, or (ii) the veil […]

All of us have a fairly comfortable with our working knowledge of IRA distribution rules and rollovers from IRA accounts. But sometimes that familiarity with the basic distribution rules can cause us to become a bit too complacent and make assumptions that are not always accurate. Complying with these rules is critical since the penalty […]

Did you know that the federal estate tax is celebrating its 100th anniversary in September? Yes, the dreaded death tax will celebrate its centennial on September 8. The estate tax was enacted on the heels of the first federal income tax. The estate tax was intended to create an additional revenue source as the United […]

Take-Away: Late last week, in response to the pandemic, the Department of Treasury released two Notices that gave taxpayer’s relief in filing their income tax returns for 2019. However, it appears that relief does not extend to the filing of federal gift tax returns or federal estate tax returns. Background: The Tax Code gives the […]

Take-Away: The CARES Act just passed by Congress enables individuals to access their retirement accounts as a financial resource in this time of crisis. Summary: A handful of the CARE Act provisions deal with the use of retirement accounts as a financial resource. A short summary of those provisions follow. Section 2202- Waiver of 10% […]

Take-Away: Trusts that give the trustee the discretion to spray income among a group of trust beneficiaries is a highly flexible tool in which to reduce that income’s exposure to high federal income tax rates imposed on irrevocable trusts. That extraordinary flexibility can, however, cause tension for both the trustee and among trust’s beneficiaries. Clearly describing […]

Take-Away: The Final IRS Regulations with regard to the 2017 Tax Act’s temporary increase in the federal gift, estate and GST tax exemptions were published in late November, 2019. Those Final Regulations provide helpful answers to two concerns that were raised by the temporary increase in an individual’s applicable exemption amount. However, the Final Regulations  […]

Take-Away: For the last several years the focus of estate planning has been on income tax saving strategies moreso than estate tax saving strategies. With the present recession much of the capital gains that those income tax strategies had hoped to avoid with a step-up in income tax basis on the owner’s death were suddenly […]

Take-Away: Many individuals are now establishing fully discretionary trusts for their children and grandchildren. The motivation behind these trusts are to shield the trust assets from the trust beneficiary’s creditors, and also to exclude the trust’s assets from being exposed to federal estate taxation on the trust beneficiary’s death. Often unaddressed in these discretionary trusts […]