Articles Posted in Estate Planning

Artists and collectors face unique estate planning considerations. Artists and collectors should keep a comprehensive inventory of their works with detailed information about each work. A useful inventory lists the name of each work and the date it was created and fixed in a tangible medium. The medium, the dimensions, and any historical information should…

Usually, when a taxpayer transfers assets to an irrevocable trust for the benefit of another person, the transferor pays gift tax on the full value of the property transferred to the trust. However, in some cases, the value of an interest in the trust that is retained by the transferor (the “grantor”) may be subtracted…

A charitable remainder trust is an irrevocable trust wherein the grantor/donor can effectively sell appreciated assets without immediate capital gains taxes, increase current cash flow, generate a current income tax charitable deduction, and ultimately reduce estate taxes. Typically, a charitable remainder trust provides that the non-charitable beneficiary (the grantor) receives payments, at least annually, during…

A qualified disclaimer is an irrevocable and unqualified refusal to accept an interest in property. Because the system of wealth transfer taxation in the United States (i.e., the federal estate, gift, and generation-skipping transfer tax) operates to impose a tax on the privilege of transferring property, the punch-line about disclaimers, for purposes of those wealth…

A durable power of attorney is a legal document that authorizes an individual to legally act on behalf of another individual. The individual granting the authority to someone else to act on their behalf is referred to as the principal, and the individual being given the authority is referred to as the agent. Executing a…

If you are a citizen or resident of the United States, you must file a gift tax return (whether or not tax is due) if you gave gifts to someone in 2020 totaling more than $15,000 (other than to your spouse). Certain gifts, called future interests, are not subject to the $15,000 annual exclusion and…

The primary reasons for making a will are: (1) to leave your property to those about whom you care in the manner and proportions you choose; (2) to choose the person(s) you want to handle your estate (i.e., executors and trustees); (3) to name a guardian for your minor children; (4) to determine how assets…

The origin of estate planning as an active force in asset conservation can be traced back to the 15th century and the English feudal system. Under that system, the primary property owner or lord of the manor, in exchange for a lifetime of faithful service and allegiance, allowed individuals to hold legal title to portions…

While virtually every American is familiar with the federal income tax, the U.S. Internal Revenue Code contains another system of taxation related to individual wealth: the taxation of the passage of wealth through gratuitous transfers of property by individuals. This overall area of federal taxation is embodied in three separate, but interrelated “taxes”: the estate…

Why do closely held corporations impose restrictions on the transfer of stock? 1. The owners of the business may desire to limit who can become a partner in the business. This is typical where the company is family-owned. Allowing an outsider non-family member is often unappealing to the original stockholders. 2 Venture capital firms and…