Transfer taxes

A View from the Experts: Select Insights from the 2018 Heckerling Institute on Estate Planning

Topics: Estate planning, Transfer taxes

Presenters at the 2018 Heckerling Institute on Estate Planning identified several enhanced areas of focus for legacy and life insurance planning post tax-reform, including (1) basis adjustment planning, (2) the potential benefits and pitfalls of portability, especially in light of the doubled federal transfer tax exemptions, and (3) the need to review and refresh existing…

Legacy Planning Post-Tax Reform – Part 1: Let Me Count the Ways: 5 Questions for Non-Taxable Estates

Topics: Tax reform, Transfer taxes

The doubling of the federal gift, estate, and generation-skipping transfer (“GST”) tax exemptions ($11.18 million in 2018) has drastically reduced the number of individuals whose estates will incur a federal estate tax. Yet, potential estate tax exposure should not be the sole motivator for legacy and life insurance planning.

Decoding Tax Reform: The Transfer Tax Impact

Topics: Tax treatment, Transfer taxes

Tax reform legislation (“H.R. 1”) was signed by the President on December 20th, enacting numerous immediate changes affecting all areas of the Internal Revenue Code (“Code”), including changes to gift, estate, and generation- skipping transfer (“GST”) taxes. Effective January 1, 2018, H.R. 1 doubles the base exemption level for the gift/estate and GST tax from…

Trust Reformation and Modification to Correct a Scrivener’s Error Will Not Result in Gift, Estate, or GST Tax Consequences

Topics: Transfer taxes

In PLR 201732029, the IRS ruled on the gift, estate, and GST tax consequences of a judicial trust reformation and modification resulting from a scrivener’s error that omitted descendants of a predeceased child from the class of beneficiaries. The IRS determined that reformation and modification of the trust was necessary to carry out the settlor’s…

Judicial Reformation to Correct Scrivener’s Error in ILIT Will Not Have Adverse Gift, Estate, or GST Tax Consequences

Topics: Estate planning, Irrevocable trusts, Transfer taxes, Trusts

In PLRs 201723002 and 201723003, the IRS ruled on the tax consequences of a judicial reformation of an irrevocable life insurance trust (ILIT) to correct a scrivener’s error that otherwise would have resulted in inclusion of the ILIT assets in the grantor’s estate, against her stated intentions in creating the trust.

PLRs Hold No Income or Transfer Tax Consequences in Trustees’ Decanting and Combination of Trusts

Topics: Estate planning, IRS, Regulation, Transfer taxes, Trusts

In PLR 201709020, the IRS stated that the trustees’ decanting of an irrevocable trust into seven separate irrevocable trusts for the benefit of the grantor’s descendants would not result in income, gift, or estate tax consequences and would not change the inclusion ratio of any of the divided trusts for GST tax purposes.

IRS Guidance on Re-Calculating Gift, Estate, & GST Tax Exemptions for pre-Windsor Transfers to Same-Sex Spouses

Topics: IRS, Regulation, Transfer taxes

Before U.S. v. Windsor, taxpayers in same-sex marriages were not treated as married for federal gift, estate, and GST tax purposes and could not claim a marital deduction for gifts or bequests to each other nor determine GST tax application based on a familial relationship as spouses. These taxpayers had to apply their gift, estate,…