Estate planning

IRS Continues to Rule Favorably on ING Trusts

Topics: Estate planning, IRS, Regulation, Trusts

In PLR 201742006, the IRS examined the tax implications of two identical incomplete gift, non-grantor trusts (“ING Trusts”) created by spouses, one by the husband and one by the wife (each a “grantor”). Each ING Trust provided for payments by a Distribution Committee (of which the grantor was a member) to the trust beneficiaries, including…

It Can Really Last Forever: Irrevocable Life Insurance Trusts & the Generation-Skipping Transfer Tax – 4 Things to Know

Topics: Estate planning, GST, Irrevocable trusts, Trusts

The GST tax generally applies to transfers to irrevocable life insurance trusts (“ILITs”) that benefit both “skip persons” (e.g., grandchildren and more remote descendants) and non-skip persons (e.g., children). The annual GST tax exclusion and GST tax exemption are available to apply to ILITs, but the rules regarding their application are complex.

Mandatory or Discretionary Trusts – Which, When, and Why

Topics: Estate planning, Trusts

A chief concern of many senior family members is that transferring wealth to the next generation may create disincentives or disrupt the lives or work ethic of younger family members. Trusts, when properly structured, offer an ideal solution to this concern. By basing distributions upon a beneficiary’s attainment of certain goals (graduating from college, matching…

IRS May Re-Examine Estate Tax Return of Predeceased Spouse to Determine Correct DSUE Amount at Surviving Spouse’s Death

Topics: Estate planning, Estate tax, IRS, Regulation

In Estate of Sower v. Commissioner, the Tax Court held that, despite issuance of a closing letter for the predeceased spouse’s estate, the IRS retained authority to re-examine the predeceased spouse’s estate tax return for the purpose of determining the correct deceased spousal unused exclusion (DSUE) amount available to the surviving spouse’s estate.

Life Insurance – A Remedy for Uncertainty.

Topics: Estate planning, General life insurance

In an uncertain environment, clients should still move forward with life insurance planning because it: (1) focuses clients on analyzing the assets required to maintain their lifestyle, (2) implements needed planning without leaving clients feeling “locked-in,” and (3) offers both a lifetime investment component and death benefit protection, while simultaneously addressing practical needs and tax...

Attention Trustees- Better Understand the Uniform Principal and Income Act

Topics: Estate planning, Trusts

Allocation of revenues (“receipts”) and costs and expenses (“disbursements”) between trust income and principal can directly impact beneficiaries and their rights to distributions. To assist trustees with treating beneficiaries fairly and impartially, most states have adopted a version of the Uniform Principal and IncomeAct (“UPIA”) to provide direction regarding the allocation of receipts and disbursements…