Private Wealth Management Trust & Estate Insights
|
|
- Herbert Lee
- 8 years ago
- Views:
Transcription
1 Private Wealth Management Trust & Estate Insights March 2011 In This Issue Taking Advantage of the Increased Gift Tax Exemption Key Takeaways: The federal gift tax exemption has risen from $1 million per donor to $5 million per donor, dramatically increasing the ability of a wealthy family to reduce overall transfer taxes through lifetime giving. The increase in the exemption may be short lived: The new tax law is scheduled to "sunset" at the end of Accordingly, wealthy families should strongly consider taking advantage of the increased exemption before the end of next year. There is some uncertainty over what will happen to an individual who has made a substantial gift if the new tax law sunsets and the exemption decreases. In most cases, however, a sunset is likely to leave the donor's estate in no worse a position than if the gift had not been made (and may leave it in a substantially better position). For many wealthy families, some of the most important changes made by the recently enacted Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the "TRA") concern wealth transfer taxes. Among other things, the TRA decreased the top transfer tax rate to 35% and increased the federal estate, gift, and generation-skipping transfer ("GST") tax exemptions to $5 million for 2011 and 2012 (increased for inflation in 2012). In particular, the increase in the gift tax exemption from $1 million to $5 million (or $10 million for a married couple) dramatically increases the ability of a wealthy individual (or couple) to minimize transfer taxes through lifetime gifts. These gifts could include an outright gift, a gift to a "dynasty trust," or the transfer of a valuable residence to a "qualified personal residence trust." In addition, the increase presents an unprecedented opportunity to make a significant gift to an "irrevocable life insurance trust" to pay the premiums on a substantial insurance policy. Unfortunately, the ability to take advantage of the increased exemptions may be fleeting: The changes made by the TRA are scheduled to "sunset" at the end of Absent legislation to extend the TRA, the gift tax exemption will revert to $1 million in 2013, and the top federal tax rate on estates and gifts will revert to 55%. This strongly suggests that many wealthy families should take advantage of this "window of opportunity" by making substantial gifts before the end of next year.
2 How Lifetime Gifts Can Reduce Estate Taxes In considering the impact of lifetime gifts on overall transfer taxes, it is useful to understand exactly how gifts can reduce transfer taxes, and what complications may arise if the TRA sunsets after the gift is made. To understand how lifetime gifts can reduce estate taxes, it is necessary to examine the somewhat complicated way that the federal estate tax is calculated. One reason this calculation is complicated is that the $5 million estate and gift tax exemption is really a "shorthand" way of referring to the amount that one can transfer taxfree by reason of something known in the law as the "applicable credit amount." Under the TRA, the applicable credit amount is $1,730,800, which equals the tax on a transfer of $5 million. 1 (If the TRA sunsets, the applicable credit amount will decrease to $345,800, which is the tax on a transfer of $1 million.) The second reason the calculation is complicated is that it is designed (1) to tax the estate at the highest estate tax brackets under the estate tax rate table, taking into account lifetime gifts; and (2) to account for the applicable credit amount that a decedent has already "used up" on lifetime gifts. This is accomplished under a three-step process: (1) A "tentative tax" is calculated on the sum of the decedent's estate and lifetime gifts. (2) The gift tax that would have been payable on the lifetime gifts (using the rate table in effect at the decedent's death) is subtracted from the tentative tax computed in step 1. Importantly, in determining how much gift tax would have been payable, the available applicable credit amount at the time of the gifts must be used. (3) The full applicable credit amount at the individual's death is subtracted from the amount computed in step 2. Here's an example: Assume that an individual with $15 million makes a lifetime gift of $5 million in 2011 and dies later that year. The gift is completely sheltered under the gift tax exemption and no gift tax is due. The following is the estate tax computation: Tentative tax on sum of. estate ($10,000,000) and (Step 1) Less applicable credit amount at time of gift (Step 2) (Step 3) $1,730,800 $5,230,800 $1,730,800 $0 $1,730,800 Estate tax $3,500,000 What is important to note is that if the decedent had not made the gift, the estate tax would have been exactly the same: $3,500,000. The decedent would have had an estate of $15 million, and the estate tax on a $15 million estate is $3,500,000. The reason there is no difference is that -- as the example illustrates -- lifetime gifts are considered in computing estate taxes. Put another way, the decedent "used up" his $5 million exemption on the lifetime gift. As a result, it was not available to reduce estate taxes at his death. The main point: A lifetime gift that uses exemption does not in and of itself -- reduce estate taxes. So why make lifetime gifts? The primary reason is that, although a lifetime gift is considered in the computation of estate taxes, any future growth of the gifted assets is not. 1 This figure ignores (1) any adjustment to the applicable credit amount beginning in 2012 as a result of inflation and (2) any potential increase in the applicable credit amount as a result of the unused exclusion amount of a deceased spouse. Private Wealth Management Trust & Estate Insights 2
3 Consequently, all income and appreciation on the gifted assets is removed from the donor's estate and escapes estate taxes at the donor's death. 2 This can save a substantial amount of tax. For example, assume again that an individual with $15 million makes a lifetime gift of $5 million in In this example, however, he survives for an additional twenty years. During that period, both the gifted assets and his remaining assets appreciate at a rate of 6% annually. At his death, his estate would be worth approximately $32 million, and the gifted assets would be worth approximately $16 million. The following is the estate tax computation (assuming no sunset of the TRA): Tentative tax on sum of estate ($32,000,000) and Less applicable credit amount at time of gift $1,730,800 $12,930,800 $1,730,800 $0 $1,730,800 3 Estate tax $11,200,000 If the decedent had not made the gift, his estate would have been worth $48 million (i.e., $32 million estate plus $16 million gifted assets), and the estate tax would have been $15,050,000. Accordingly, the gift saved $3,850,000 in taxes, (i.e., 35% of the growth of the gifted assets). 4 Estate Tax "Recapture" Although the benefits of lifetime giving can be substantial, there is some uncertainty over what will happen to an individual who has made a substantial gift if the TRA sunsets and the gift and estate tax exemption decreases. Absent additional legislation or administrative action by the IRS, the answer is that there would be a "recapture" of the benefits of the higher exemption under the TRA at the individual's death. (There would not, however, be any retroactively imposed gift taxes.) Put another way, an individual would receive only the benefit of the exemption applicable at his death. For example, assume an individual with $15,000,000 makes a gift of $5,000,000 in 2011 and dies after sunset in 2013 (when the exemption is only $1,000,000 and the top rate is 55%). The gift is completely sheltered under the gift tax exemption and no gift tax is due. The following is the estate tax computation: 5 Tentative tax on sum of estate ($10,000,000) and Less applicable credit amount at time of gift (assuming $5,000,000 applicable exclusion amount and 55% table) $2,390,800 $7,890,800 $2,390,800 $0 $345,800 Estate tax $7,545,000 2 Other ways in which lifetime gifts can reduce estate taxes include the following: (1) gifts of certain types of assets (e.g., minority interests in a closely held business) may be subject to "valuation discounts" for gift tax purposes, using less exemption than if the whole business was transferred at death; (2) gifts may reduce state estate or inheritance taxes, even if the gifted property does not increase in value after the gift; and (3) the gift may be made to a "grantor trust," which is a trust all of the income of which is taxed to the grantor; the grantor's payment of this income tax reduces his estate (and allows the trust assets to grow income taxfree). Although beyond the scope of this article, a donor should also bear in mind that the first $13,000 (indexed for inflation) of annual gifts to a donee qualify for the gift tax "annual exclusion" and, therefore, do not use up any gift tax exemption. Accordingly, an annual exclusion gift removes from the donor's estate not only the future growth of the gifted assets, but also the assets themselves. 3 Ignores any indexing for inflation. 4 Of course, the opposite is also true: If the gifted assets had decreased in value, and that decrease otherwise would have occurred in the donor's estate, the estate taxes payable at the donor's death would have been lower if he had not made the gift. 5 For the sake of simplicity, all remaining examples (1) ignore the 5% "surtax" that would apply when the sum of the estate and lifetime gifts exceeds $10 million if the TRA sunsets, and (2) assume no change in the value of any assets between the date of the gift and the date of death. Private Wealth Management Trust & Estate Insights 3
4 . The estate tax is $7,545,000. If the gift had not been made, the estate would have been $15 million, and the estate tax would have been the same $7,545,000. Accordingly, making the gift did not cost any additional tax. The estate tax on just the $10 million estate would have been $4,795,000. Therefore, there is $2,750,000 of tax attributable to the $5 million gift (i.e., $5,000,000 x 55%). This is the "recapture." Notably, some planners believe that if the exemption decreases in the future (e.g., because the TRA sunsets), there will likely be legislation or administrative action eliminating any "recapture." If so, it will be extremely valuable to take advantage of the temporary increase in the exemption. For example, assume an individual with $15,000,000 makes a gift of $5,000,000 in 2011 and dies after "sunset" in 2013 (when the exemption is only $1,000,000 and the top rate is 55%). The gift is completely sheltered under the gift tax exemption and no gift tax is due. The following is the estate tax computation if there is no "recapture": Tentative tax on sum of estate ($10,000,000) and lifetime gift ($5,000,000) Less applicable credit amount at time of gift (assuming $1,000,000 applicable exclusion amount and 55% table) $2,390,800 $7,890,800 $345,800 $2,045,000 $345,800 Estate tax $5,500,000 The estate tax is only $5,500,000. If the gift had not been made, the estate would have been $15 million, and the estate tax would have been $7,545,000. Making the gift saved $2,045,000 of estate tax. This is because the gift completely removed $4 million from the estate tax calculation. 6 Possible Additional Complications As noted above, even if a gift is subject to "recapture" because the TRA sunsets, it generally leaves an individual's estate in no worse a position that if he had not made the gift. Moreover, it can achieve the significant benefits of making a lifetime gift, including removing the income and appreciation on the gifted assets from the estate. In many circumstances, therefore, making a gift could be a free shot: a big potential win if there is no "recapture," and no harm done if there is "recapture." But In certain cases, "recapture" could result in significant consequences that the donor does not intend. For example, assume that an individual with $15 million makes a gift of $5 million in 2011 to a trust for his children, and dies after "sunset" in 2013 (when the applicable exclusion amount is only $1 million and the top rate is 55%). The gift is completely sheltered under the gift tax exemption and no gift tax is due. He leaves his entire remaining $10 million estate outright to his wife. Because of "recapture," some of that $10 million must be used to pay the estate tax attributable to the lifetime gift. As a result, the entire $10 million cannot qualify for the marital deduction. This results in estate tax, which further reduces the marital deduction (because it does not pass to his wife), which further increases the estate tax, and so on. This is known in estate tax jargon as an "interrelated" or "circular" computation. 6 As the example illustrates, this is technically accomplished by computing the gift taxes that would have been payable on the gift using the exemption available at the individual's death (i.e., $1 million), rather than at the time of the gift (i.e., $5 million), and subtracting the gift tax that would have been payable (i.e. $2,045,000) from the tentative estate tax. Private Wealth Management Trust & Estate Insights 4
5 Tentative tax on taxable estate ($4,566,666) and. The taxable estate is $4,566,666 because that is the estate tax payable from the $10,000,000 passing to wife that cannot qualify for the estate tax marital deduction. Less applicable credit amount at time of gift (assuming $5,000,000 applicable exclusion amount and 55% table) $2,390,800 $4,902,466 $2,390,800 $0 $345,800 Estate tax $4,566,666 In this case, even though the individual leaves his entire estate outright to his wife, there is still $4,566,666 of estate tax payable at his death. The wife is left with only $5,433,334. (The estate tax at her death would be $2,283,334, and the total tax over both estates would be $6,850,000.) Assuming instead (1) that the individual had given the $5 million to a trust for his children at his death and the balance of his estate to his wife, and (2) that the estate tax was paid out of the gift to his children, the estate tax would have been only $2,045,000. As a result, there would have been $2,521,666 less estate tax, and the wife would have received the full $10 million, though the trust for the children would have received the somewhat lesser amount of $2,955,000. (The estate tax at the wife's death would be $4,795,000. Therefore, the total tax over both estates would be virtually the same as in the prior example: $6,840,000). 7 Conclusion Making lifetime gifts is one of the best ways to minimize estate taxes. An important reason is that the gift removes all of the future income and appreciation on the gifted assets from the donor's estate. The increase in the gift tax exemption under the TRA to $5 million presents wealthy individuals with a tremendous opportunity to make significant lifetime gifts. Unfortunately, under current law, the TRA sunsets at the end of next year, and the exemption reverts to $1 million. In most cases, it makes sense to consider taking advantage of the increased exemption before the TRA expires because a sunset will generally leave the donor's estate in no worse a position than if the gift had not been made (and may leave it in a substantially better position). However, it has the potential in some cases to result in significant unintended consequences. Accordingly, one should always consult with a tax or legal advisor in advance of making any substantial gifts. UBS Private Wealth Management Senior Wealth Strategists Ann Bjerke, Director Jeff Brooks, Director Joyce Crivellari, Director Jeffrey Gaccione, Director David Weinreb, Director Erin Wilms, Director 7 Of course, the individual could also have decided to give only $1million to his children at death and the remaining $14 million to his wife. This would eliminate all federal estate tax at his death, but would result in $6,995,000 of tax at his wife's death. Consequently, the total tax over both estates would be about $145,000 greater. UBS Financial Services Inc. does not provide legal or tax advice. Any discussion of tax matters contained herein is not intended to be used, and cannot be used or relied upon, by any taxpayer for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or tax-related matter(s). Private Wealth Management Trust & Estate Insights 4
6 2011 UBS Financial Services Inc. All rights reserved. Member SIPC. UBS Financial Services Inc. Private Wealth Management is a business unit within UBS Financial Services Inc. UBS Financial Services Inc. and UBS International Inc. are subsidiaries of UBS AG.
Portability of a Deceased Spouse s Unused Exclusion Amount
Wealth Strategy Report Portability of a Deceased Spouse s Unused Exclusion Amount OVERVIEW The concept informally known as portability is now permanent as a result of the enactment of the American Taxpayer
More informationGIFTS: THE KEY TO ESTATE TAX SAVINGS
GIFTS: THE KEY TO ESTATE TAX SAVINGS THE LAW FIRM OF ELLEN M. WINKLER 58 Atlantic Avenue Marblehead, MA 01945 Tel. 781-631-6404 Fax 781-631-7338 www.emwinklerlaw.com Estate taxes can take a significant
More informationBefore the Door Closes
Before the Door Closes With significant tax provisions set to expire at year end, planning now can capture these unique opportunities before they may disappear by Richard James and Steven Lavner The temporary
More informationPortability of the Deceased Spousal Unused Exclusion Amount under the Tax Relief Act of 2010. Connecticut Bar Association Estates & Probate Section
Portability of the Deceased Spousal Unused Exclusion Amount under the Tax Relief Act of 2010 Bryon W. Harmon Shipman & Goodwin LLP bharmon@goodwin.com Connecticut Bar Association Estates & Probate Section
More informationTaking Advantage of the New Gift and Estate Tax Law
product resource Taking Advantage of the New Gift and Estate Tax Law summary tra 2010 in brief Congressional debate about whether to extend tax cuts put into place during the Bush administration came to
More informationThe Basics of Estate Planning
The Basics of Estate Planning Introduction The process of estate planning can be a daunting prospect. Often individuals will avoid the process altogether. Obviously, this is not the best approach since
More informationGift and estate planning: Opportunities abound
Gift and estate planning: Opportunities abound Vanguard research July 2013 Executive summary. Under federal gift and estate tax rules, individuals can potentially make significant gifts that are exempt
More informationEstate, Gift, And GST Taxes: What Actually Happened
Estate, Gift, And GST Taxes: What Actually Happened Kenneth A. Goldstein The increased gift tax exemption and other provisions contained in the 2011 Act provide tremendous opportunities to save federal
More informationHERMENZE & MARCANTONIO LLC ADVANCED ESTATE PLANNING TECHNIQUES - 2015
HERMENZE & MARCANTONIO LLC ADVANCED ESTATE PLANNING TECHNIQUES - 2015 I. Overview of federal, Connecticut, and New York estate and gift taxes. A. Federal 1. 40% tax rate. 2. Unlimited estate and gift tax
More information2010 Tax Relief Act: Estate, Gift and Generation Tax Provisions
Estate, Gift and Generation Tax Provisions On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Tax Relief
More informationThe Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Advisory Estates, Trusts & Tax Planning Tax March 3, 2011 New Estate and Gift Tax Laws for 2011-2012 and Transfer Tax Provisions of the President's Proposed Budget for 2012 by Jennifer Jordan McCall, Ellen
More informationNew Portability Rules: A Cure for Incomplete Estate Planning
New Portability Rules: A Cure for Incomplete Estate Planning Many CPAs are involved in representing estates of decedents who died in 2011 and 2012. In dealing with such estates, it is important to focus
More informationThe. Estate Planner. Is your estate plan flexible? Estate tax law uncertainty requires options. No time like the present
The Estate Planner July/August 2012 Is your estate plan flexible? Estate tax law uncertainty requires options No time like the present With favorable estate tax and real estate environments, use a QPRT
More informationThe New Tax Relief Act: How Will You Be Impacted?
STRATEGIC THINKING The New Tax Relief Act: How Will You Be Impacted? The President signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( the Act ) on December 17th,
More informationSales Strategy Sale to a Grantor Trust (SAGT)
Estate planners have been using the Irrevocable Life Insurance Trust (ILIT) for many years, to increase wealth and liquidity outside the taxable estate. 1 However, transfers to ILITs One effective technique
More informationbpq^qbi=dfcq=^ka=dbkbo^qflkjphfmmfkd== molsfpflkp=lc=qeb=q^u=obifbci== rkbjmilvjbkq=fkpro^k`b=^rqelofw^qflki=
bpq^qbi=dfcq=^ka=dbkbo^qflkjphfmmfkd== molsfpflkp=lc=qeb=q^u=obifbci== rkbjmilvjbkq=fkpro^k`b=^rqelofw^qflki= ^ka=gl_=`ob^qflk=^`q=lc=omnm== E qeb=q^u=obifbc=^`qòf= John H. Turner, III Phone 804.420.6480
More informationWealth Transfer Planning Considerations for 2011 and 2012
THE CENTER FOR WEALTH PLANNING Wealth Transfer Planning Considerations for 2011 and 2012 March 2011 The Center for Wealth Planning is part of Credit Suisse s Private Banking USA and does not provide tax
More informationEstate and Gift Tax Planning: 2013 Update
Estate and Gift Tax Planning: 2013 Update Moira S. Laidlaw, Esq. Two Depot Plaza, Suite 203 Bedford Hills, New York 10507 mlaidlaw@laidlawfirm.com Disclaimer This is an overview not a complete statement
More informationCOOPERMAN LESTER MILLER CARUS LLP ATTORNEYS-AT-LAW 1129 NORTHERN BOULEVARD MANHASSET, NY 11030 (516) 365-1400 FAX: (516) 365-1404 www.clmclaw.
irect Di COOPERMAN LESTER MILLER CARUS LLP ATTORNEYS-AT-LAW 1129 NORTHERN BOULEVARD MANHASSET, NY 11030 (516) 365-1400 FAX: (516) 365-1404 www.clmclaw.com CLIENT MEMORANDUM NEW YORK CITY OFFICE 767 THIRD
More informationA Powerful Way to Plan: The Grantor Retained Annuity Trust
Strategic Thinking A Powerful Way to Plan: The Grantor Retained Annuity Trust According to The Taxpayer Relief Act of 2010, the estate and gift exemption amount has been increased temporarily, for 2011
More informationTAX RELIEF ACT UPDATED DECEMBER 29, 2010
2010 TAX RELIEF ACT UPDATED DECEMBER 29, 2010 TAX RELIEF, UNEMPLOYMENT INSURANCE RE-AUTHORIZATION, AND JOB CREATION ACT OF 2010 INTRODUCTION On December 17, 2010, President Obama signed the much-anticipated
More informationThe New Era of Wealth Transfer Planning #1. American Taxpayer Relief Act Boosts Life Insurance. For agent use only. Not for public distribution.
The New Era of Wealth Transfer Planning #1 American Taxpayer Relief Act Boosts Life Insurance For agent use only. Not for public distribution. In January 2013 Congress stepped back from the fiscal cliff
More informationThe Perils and Prospects of Portability
Gift and Estate Tax Planning Insights The Perils and Prospects of Portability Jeffrey M. Cheyne, Esq. With the passage of federal tax relief laws in recent years, the porting of unused federal estate tax
More information2012 IS A PERFECT STORM FOR GIFTING
Summer 2012 Editor: Julius Giarmarco, J.D., LL.M. Tenth Floor Columbia Center 101 West Big Beaver Road Troy, Michigan 48084-5280 (248) 457-7000 Fax (248) 457-7219 www.disinherit-irs.com Assistant Editor:
More informationWealth transfer and gifting strategies. A guide to lifetime gifts. Life s better when we re connected
Wealth transfer and gifting strategies A guide to lifetime gifts Life s better when we re connected Index 3 Introduction 4 Transfer tax basics 5 An overview of the federal gift tax system 6 Outright gifts
More informationMaking life work for estate planning
Life insurance opportunities Making life work for estate planning Financial professional s guide m A Securian Company The Tax Relief Act of 2010 significantly changed the federal transfer tax system, including
More informationUS Federal Estate Tax Update and Overview. Ian Watson 3 Stone Buildings. I. A history lesson: The US Federal Estate and Gift Tax in 2001
March 2009 US Federal Estate Tax Update and Overview Ian Watson 3 Stone Buildings I. A history lesson: The US Federal Estate and Gift Tax in 2001 As of March 20101, the US federal estate, gift and generation-skipping
More informationIN THIS ISSUE: March, 2011 j Planning with the $5 Million Gift Tax Exemption
IN THIS ISSUE: Federal Gift, Estate and GST Exemptions and Tax Rates New York State Gift & Estate Tax March, 2011 j Planning with the $5 Million Gift Tax Exemption By: Louis W. Pierro, Esq., Philip A.
More informationKATZ BASKIES LLC Highlights of the new 2010 Tax Relief Act
KATZ BASKIES LLC Highlights of the new 2010 Tax Relief Act On December 17, the President signed the The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( The Tax Relief
More informationADVANCED PLANNING CONCEPTS IN LIGHT OF THE AMERICAN TAXPAYER RELIEF ACT (October 11, 2013)
ADVANCED PLANNING CONCEPTS IN LIGHT OF THE AMERICAN TAXPAYER RELIEF ACT (October 11, 2013) By: Phoebe Moffatt, Attorney CERTIFIED AS A SPECIALIST IN ESTATE AND TRUST LAW STATE BAR OF ARIZONA BOARD OF LEGAL
More informationPlanning your estate
Planning your estate A general guide to estate planning Policies issued by: American General Life Insurance Company The United States Life Insurance Company in the City of New York What is estate planning?
More informationEstate Planning, Probate & Asset Protec-
Estate Planning, Probate & Asset Protec- June 2011 Midyear Tax Update and Planning Guide Changes to the Estate Tax Laws Create a Brief Window of Opportunity to Reduce Tax Exposure, But Only for Clients
More informationEstate Tax Exclusion Portability: Policy to Planning Ideas
Checkpoint Contents Estate Planning Library Estate Planning Journals Estate Planning Journal (WG&L) Estate Planning Journal 2012 Volume 39, Number 10, October 2012 Articles Estate Tax Exclusion Portability:
More informationMaximizing Wealth Transfer using Innovative Trust Designs
Maximizing Wealth Transfer using Innovative Trust Designs For For Producer or or Broker/Dealer Use Use Only. Only. Not Not for for Public Distribution. Why Life Insurance? Provides for: Personal family
More informationH.R. 1836: THE ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001 ( ACT )
STEVEN L. CANTOR HAL J. WEBB STEVEN L. CANTOR, P.A. BRICKELL BAY OFFICE TOWER SUITE 2908 1001 BRICKELL BAY DRIVE MIAMI, FLORIDA 33131 TELEPHONE(305)374-3886 FACSMILE(305)371-4564 NAPLES OFFICE SUITE 200
More informationJanuary 2013. 900 Seventeenth Street N.W. Suite 1000 Dallas, TX 75201 Washington D.C. 20006 214-981-9407 202-478-7516. 300 Crescent Court Suite 800
American Taxpayer Relief Act of 2012 Overview of Provisions and Planning Implications for Estate Planning; Estate, Gift and GST Tax Provisions in Effect in 2012 Made Permanent, Subject to Increase in Tax
More informationBy Edward L. Perkins, JD, LLM. CPE CREDIT - 1.0 Hour of Interactive Self-Study
Estate Planning After the Tax Relief Act of 2010 What to Do? By Edward L. Perkins, JD, LLM CPE CREDIT - 1.0 Hour of Interactive Self-Study FIELD OF STUDY - Taxation PROGRAM LEVEL - Intermediate PREREQUISITE
More informationWealthiest Families Know: 2013 & Beyond
What the Wealthiest Families Know: 2013 & Beyond Determine How Estate Planning Strategies and Life Insurance May Help You Turn Your Goals into a Wealth Legacy Whether you acquired it or inherited it, wealth
More informationTHE FUTURE OF ESTATE PLANNING - 2012 AND BEYOND
THE FUTURE OF ESTATE PLANNING - 2012 AND BEYOND By Edward L. Perkins, JD, LLM (Tax), CPA I. The New Estate Planning Reality A. The Return of the Federal Estate Tax, et al. 1. The Estate Tax Returns After
More informationCLIFF A CASE FOR CHARITABLE GIVING AND DEFENSIVE POSITIONING
THE FISCAL CLIFF A CASE FOR CHARITABLE GIVING AND DEFENSIVE POSITIONING The CriTTenTon FoundaTion & LJPr, LLC Leon C. LaBreCque, JD, CPa, CFP, CFa ! Preface The Perfect Tax Storm: Prospective Expiration
More informationDecember 2010 Special Edition. Edited by Henry J. Leibowitz
December 2010 Special Edition A monthly report for wealth management professionals. Edited by Henry J. Leibowitz As part of our ongoing efforts to keep wealth management professionals informed of recent
More informationWealth Transfer Planning
Wealth Transfer Planning For Business Owners ESTATE PLANNING SERVICES Merrill Lynch does not provide tax, accounting or legal advice. Any information presented about tax considerations affecting client
More informationIssues INSIGHTS AND. Dramatic Changes for Trusts & Estates Laws in New York State What you should know as a New York resident
Issues AND INSIGHTS May 2014 Dramatic Changes for Trusts & Estates Laws in New York State What you should know as a New York resident IN THIS ARTICLE Passage of the Executive Budget for 2014 2015 by the
More informationSpousal Access Trust Makes Use of Enlarged Gift Tax Exemption
Spousal Access Trust Makes Use of Enlarged Gift Tax Exemption Properly drafted mutual trusts let couples take advantage of the $5.12 million gift tax exemption before it expires, without relinquishing
More informationEstate Planning Strategies in a Low-Interest Rate Environment
Estate Planning Strategies in a Low-Interest Rate Environment In this current low interest rate environment, there are some very effective estate planning strategies for transferring substantial assets
More informationTrusts & Estates. Many Estate Planning Opportunities May End in 2012 The Time to Act is Now
ALBANY AMSTERDAM ATLANTA AUSTIN BOSTON CHICAGO DALLAS DELAWARE DENVER FORT LAUDERDALE HOUSTON LAS VEGAS LONDON* LOS ANGELES MEXICO CITY+ MIAMI NEW JERSEY NEW YORK ORANGE COUNTY ORLANDO PALM BEACH COUNTY
More informationEstate planning strategies using life insurance in a trust Options for handling distributions, rollovers and conversions
Estate planning strategies using life insurance in a trust Options for handling distributions, rollovers and conversions Life s better when we re connected Table of contents Find your questions review
More informationTax Facts Quick Reference 2012
Wealth Management Services Tax Facts Quick Reference 2012 Income Investment Estate Retirement Social Security FOR USE BY FINANCIAL ADVISORS AND CLIENTS IN CONSULTATION WITH THEIR FINANCIAL ADVISOR FOR
More informationThe Tax Relief, Unemployment Insurance Reauthorization
Reproduced by permission. 2012 Colorado Bar Association, 41 The Colorado Lawyer 87 (September 2012). All rights reserved. TAX LAW The Estate Tax Clawback: Fact or Fiction by Steven M. Weiser For the first
More informationPreserve and protect your legacy. UBS Trust Company, N.A.
Preserve and protect your legacy UBS Trust Company, N.A. Contents Common trust and estate planning documents.... 2 Will... 2 Living or revocable trust.... 2 Living will and health care proxy... 2 Financial
More informationEstate Planning Considerations for Ohio Families
Estate Planning Considerations for Ohio Families Section 9 Ohio and Federal Estate Settlement Costs by Jim Polson, David Miller, and Russell Cunningham* Competent estate planning requires consideration
More informationClient Tax Letter. Reducing Uncertainty, Increasing. Complexity. What s Inside. April/May/June 2013
Client Tax Letter Tax Saving and Planning Strategies from your Trusted Business Advisor sm Reducing Uncertainty, Increasing Complexity Each April, most Americans file their income tax returns for the previous
More informationConsiderations in the Use of Life Insurance in the Estate Plan
Considerations in the Use of Life Insurance in the Estate Plan There are few practitioners who would argue that life insurance doesn t belong in an estate plan or that life insurance shouldn t at least
More informationFEDERAL AND NEW JERSEY ESTATE TAX UPDATE
FEDERAL AND NEW JERSEY ESTATE TAX UPDATE January 18, 2011 Presented by: Brian D. Reynolds, Esq. MANTELL & PRINCE, P.C. Mountain Heights Center at Berkeley Heights 430 Mountain Avenue Murray Hill, New Jersey
More informationSales to IDGTs: A Hearty Recipe for Tax Savings
Sales to IDGTs: A Hearty Recipe for Tax Savings Intentionally defective grantor trusts may replace GRATs as the chicken soup of estate tax planning. BY LISA S. PRESSER, LANCE T. EISENBERG AND KRISTEN A.
More informationLIFE INSURANCE TRUSTS
LIFE INSURANCE TRUSTS Robert M. Mendell, JD, CPA* Robert M. Mendell, Attorney at Law, P.C. 908 Town & Country Blvd. Suite 120 Houston, Texas 77024 (713) 888-0700 Fax: (713) 888-0800 Email: rmendell@mendellgroup.com
More informationAmerican Taxpayer Relief Act of 2012- UPDATED
American Taxpayer Relief Act of 2012- UPDATED On January 2, 2013, the President signed the American Taxpayer Relief Act, thus ending the nation s brief stint over the fiscal cliff a confluence of expiring
More informationAdvanced Markets Estate Planning for Non-Citizens in the United States
Estate Planning for Non-Citizens in the United States SINGLE LIFE SPOUSAL ACCESS TRUSTS: A LIFE INSURANCE ALTERNATIVE As large numbers of people from other countries settle in the United States (U.S.),
More informationEstate Planning Strategies Using Life Insurance In Times of Estate Tax Uncertainty
Estate Planning Strategies Using Life Insurance In Times of Estate Tax Uncertainty This has been prepared by the Marketing Staff of Prudential to assist our producers. It is designed to provide general
More informationThe Effective Use of Life Insurance in Wealth Transfer Planning
INDIVIDUAL LIFE INSURANCE A Consumer Resource The Effective Use of Life Insurance in Wealth Transfer Planning A Guide for Professionals and Consumers Table of Contents INTRODUCTION What is Wealth Transfer
More information16. Tax on Lifetime Gifts
16. Tax on Lifetime Gifts Let s suppose you have reviewed your estate and determined that you are subject to federal estate tax. (Under normal circumstances, your individual estate is taxable if it exceeds
More informationWEALTH TRANSFER TAXES
WEALTH TRANSFER TAXES How do the estate, gift, and generation-skipping transfer taxes work?... 1 Who pays the estate tax?... 2 How many people pay the estate tax?... 2 How could we reform the estate tax?...
More informationAMBRECHT & ASSOCIATES
AMBRECHT & ASSOCIATES TAX AND ESTATE PLANNING ATTORNEYS JOHN W. AMBRECHT, JD, MBA, LLM 1224 COAST VILLAGE CIRCLE, SUITE 32 BROOKE T. CLEARY, JD, LLM SANTA BARBARA, CA 93108 PARALEGALS: (ADMITTED ALSO IN
More informationEstate Planning Basics. An Overview of the Estate Planning Process
Estate Planning Basics An Overview of the Estate Planning Process What Is an Estate Plan? An estate plan is a map This map reflects the way you want your personal and financial affairs to be handled in
More informationSpousal Access Trusts Access To Cash Value Potential Through Flexible Trust Planning
SALES STRATEGY Guiding you through life. ESTATE PLANNING Spousal Access Trusts Access To Cash Value Potential Through Flexible Trust Planning The Concerns Many clients who are concerned about maximizing
More informationBASIC ESTATE PLANNING AFTER THE TAX RELIEF ACT OF 2010 ( ACT ) NOVEMBER 2, 2011. David L. Higgs Husch Blackwell LLP
BASIC ESTATE PLANNING AFTER THE TAX RELIEF ACT OF 2010 ( ACT ) NOVEMBER 2, 2011 David L. Higgs Husch Blackwell LLP Basic Estate Planning After the Tax Relief Act of 2010 ( Act ) The Act was passed and
More informationCLIENT GUIDE. Advanced Markets. Estate Planning Client Guide
CLIENT GUIDE Advanced Markets Estate Planning Client Guide TABLE OF CONTENTS Why Create an Estate Plan?........................ 1 Basic Estate Planning Tools......................... 2 Funding an Irrevocable
More informationIn the Know December 30, 2010
In the Know December 30, 2010 On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 aka the 2010 Tax Relief Act. Below we break
More informationThe American Tax Relief Act of 2012 (HR 8, the Act )
NATIONAL CAPITAL GIFT PLANNING COUNCIL The Fiscal Cliff, Taxes and Planned Giving: Where Are We Now? Robert E. Madden Susan Leahy BLANK ROME LLP JANUARY 9, 2013 The American Tax Relief Act of 2012 (HR
More information10 common IRA mistakes
10 common mistakes Help protect your valuable retirement assets Not FDIC Insured May Lose Value No Bank Guarantee Not Insured by Any Government Agency You ve worked hard to build your retirement assets......
More informationPresentations also allow you to add an introductory note specifically for the client receiving the presentation.
Firm Name Team Name (if one) CPA Planner Name, Credentials Title Street Address City, NY 13160 Phone number xext # Alternate phone # address@email.com website URL Estate Tax Presentations also allow you
More informationA Sole Proprietor Insured Buy-Sell Plan
A Sole Proprietor Insured Buy-Sell Plan At a sole proprietor s death, the business is dissolved and all business assets and liabilities become part of the sole proprietor's personal estate. Have you evaluated
More informationThe Perfect Estate Planning Storm By: John A. House, ChFC Together, current economic conditions and the New Tax Rules are intriguing!
The Perfect Estate Planning Storm By: Together, current economic conditions and the New Tax Rules are intriguing! There has never been a better opportunity than today! Seldom in the history of the Tax
More informationModern Estate Planning Made Easy
Modern Estate Planning Made Easy Presented March 9, 2011 By Mark J. Bradley Ruder Ware 800-477-8050 mbradley@ruderware.com Ruder, Ware, L.L.S.C. 500 First Street, Suite 8000 P.O. Box 8050 Wausau, WI 54402-8050
More informationBASICS * Irrevocable Life Insurance Trusts
KAREN S. GERSTNER & ASSOCIATES, P.C. 5615 Kirby Drive, Suite 306 Houston, Texas 77005-2448 Telephone (713) 520-5205 Fax (713) 520-5235 www.gerstnerlaw.com BASICS * Irrevocable Life Insurance Trusts Synopsis
More informationHow To Make A Credit Shelter Trust A Tax Free Trust
Does the American Taxpayer Relief Act Eliminate the Need for Credit Shelter Trusts? By: George L. Schoenbeck, Sosin & Arnold, Ltd. Regardless of their areas of focus, most lawyers find themselves working
More informationProducer Guide For producer use only. Not for distribution to the public.
Dy n a s t y Tru s t Producer Guide For producer use only. Not for distribution to the public. Dynasty Trusts The following overview provides general information on the design and operation of Dynasty
More informationSales Strategy Estate Planning for Non-Citizens in the United States
Sales Strategy Estate Planning for Non-Citizens in the United States SINGLE LIFE SPOUSAL ACCESS TRUST: A LIFE INSURANCE ALTERNATIVE As large numbers of people from other countries settle in the United
More informationEstate Planning Basics
ABSTRACT When the 2001 Economic Growth and Tax Relief Reconciliation Act expired in 2010, Congress extended the law through the end of the year 2012 and increased the estate tax exemption. The American
More informationWISCONSIN: AN ESTATE PLANNING PARADISE 1. Andrew J. Willms, J.D., LL.M Willms, S.C., Thiensville, Wisconsin
WISCONSIN: AN ESTATE PLANNING PARADISE 1 Andrew J. Willms, J.D., LL.M Willms, S.C., Thiensville, Wisconsin Dean T. Stange, J.D. Neider & Boucher, S.C., Madison, Wisconsin Introduction Wisconsin is well
More informationGifting: A Property Transfer Tool of Estate Planning
Gifting: A Property Transfer Tool of Estate Planning by Marsha A. Goetting, Ph.D., CFP, CFCS, Professor and Extension Family Economics Specialist; and Joel Schumacher, Extension Economics Associate Economics
More informationIDEAS February 2012. Make Big Gifts to a Dynasty ILIT
IDEAS February 2012 Make Big Gifts to a Dynasty ILIT Summary Make big gifts to a dynasty trust and the assets will be out of the transfer tax system forever. Use life insurance for an even more effective
More informationCrunch or Crucible? Upcoming Changes in the Federal Tax Law A Special Edition Tax Guide for Friends and Alumni of Pomona College
Upcoming Changes in the Federal Tax Law A Special Edition Tax Guide for Friends and Alumni of Pomona College Pomona College, Office of Trusts & Estates, 550 N. College Ave., Claremont, CA 91711 www.pomona.planyourlegacy.org
More informationTax Relief, Unemployment Insurance Re- Authorization and Job Creation Act of 2010 Generation Skipping Transfer-Tax Issues Estate and Gift Tax Planning
Tax Relief, Unemployment Insurance Re- Authorization and Job Creation Act of 2010 Generation Skipping Transfer-Tax Issues Estate and Gift Tax Planning Robert A. DeVellis, Esq. Blair & Potts, PC 281 Tresser
More informationLeveraging wealth transfer using private financing
Private Financing Strategy Leveraging wealth transfer using private financing Not a bank or credit union deposit or obligation Not insured by any federal government agency Not FDIC or NCUA/NCUSIF insured
More informationSTOP! PROCEED WITH CARE: Gifts to Life Insurance Trusts in 2010
KRISTI MATHISEN, JD AND CPA The first day of 2010 brought repeal of both the estate and generation-skipping transfer (GST) taxes. It was an occurrence that some celebrated, some bemoaned, and most expected
More informationEstate Planning. And The Second To Die Program. www.infarmbureau.com
Estate Planning And The Second To Die Program www.infarmbureau.com Estate Planning and the Second to Die Program from Indiana Farm Bureau Insurance A source of satisfaction for most married couples is
More informationESTATE PLANNING AND IRAs
ESTATE PLANNING AND IRAs The Selection of a Traditional IRA Beneficiary Presented by Edward Jones Trust Company This outline was intended solely to facilitate discussion regarding certain estate planning
More informationHighlights of the 2010 Tax Relief Act
On December 7, 200, President Barack Obama signed into law H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 200 (the 200 Tax Relief Act). This massive bill affects
More informationBusiness Succession Planning. 2011 Morgan Stanley Smith Barney LLC. Member SIPC
2011 Morgan Stanley Smith Barney LLC. Member SIPC 2011-PS-541 Expires: February 2012 Date of First Use: February 2011 Updated/Reviewed: February 2011 Overview Why Succession Planning is Important Common
More informationAdvisory. Will and estate planning considerations for Canadians with U.S. connections
Advisory Will and estate planning considerations for Canadians with U.S. connections Canadian citizens and residents may be exposed to U.S. estate, gift, and generation-skipping transfer tax (together,
More informationAdvanced Designs. Pocket Guide. Private Split-Dollar Life Insurance Designs AD-OC-724B
Advanced Designs Pocket Guide Private Split-Dollar Life Insurance Designs AD-OC-724B This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal,
More informationEstate Tax Overview. Emphasis on Generation Skipping Transfers
Estate Tax Overview Emphasis on Generation Skipping Transfers 1 A Brief History - 1916 The Revenue Act of 1916 (39 Stat. 756) created a tax on the transfer of wealth from an estate to its beneficiaries,
More informationWealth Planning. Wealth Planning for the Sale of a Business
Wealth Planning Wealth Planning for the Sale of a Business JULY 2014 Selling your business may be the most important financial event in your life. In some cases, the business has been family-owned for
More informationHISTORY, PRESENT LAW, AND ANALYSIS OF THE FEDERAL WEALTH TRANSFER TAX SYSTEM
HISTORY, PRESENT LAW, AND ANALYSIS OF THE FEDERAL WEALTH TRANSFER TAX SYSTEM Scheduled for a Public Hearing Before the SUBCOMMITTEE ON SELECT REVENUE MEASURES OF THE HOUSE COMMITTEE ON WAYS AND MEANS on
More informationEstate Tax Reduction Strategies
Estate Tax Reduction Strategies Foreword This publication is designed to provide information in regard to estate planning and various estate tax reduction strategies. It is provided with the understanding
More informationCustodial accounts 3. Kiddie tax 4. Estimated tax payments 4. Retirement plans 6. 2015 individual income tax rates 10. Charitable contributions 12
a b 2015 tax planning guide The confidence to pursue all your life goals begins with a plan. Advice. Beyond investing. Your financial life encompasses much more than the current markets. It includes your
More informationHow does an ILIT work? STOP! Proceed With Care: Gifts to Life Insurance Trusts in 2010
STOP! Proceed With Care: Gifts to Life Insurance Trusts in 2010 Kristi Mathisen, JD and CPA The first day of 2010 brought repeal of both the estate and generation-skipping transfer (GST) taxes. It was
More informationAdapting Estate Planning Strategies to Meet Client Needs and a Changing Legal
Adapting Estate Planning Strategies to Meet Client Needs and a Changing Legal and Political Landscape Daniel S. Rubin Partner Moses & Singer LLP Introduction The past year has been a year of significant
More informationRising tuition for college education is a daunting
By Sharon L. Klein Paying for the (Grand) Kids College Know all the options and combinations thereof Rising tuition for college education is a daunting reality for many parents and grandparents. Even the
More information