Articles Posted in Estate Planning

A trust is not taxed on income distributed in the year earned. Rather, the beneficiary who receives the income is liable for the tax. If the income is accumulated, the trust is taxed on the income. In addition, the beneficiary generally must pay tax on the income when it is distributed. The beneficiary does receive…

A trust arrangement popular among well-to-do families concerned not only with their children’s financial security, but with the children’s behavior, is the so-called “incentive trust.” In general, the right of a trust beneficiary to receive certain financial benefits from the trust is expressly conditioned upon the beneficiary’s performing or achieving a defined objective, or refraining…

A “disclaimer” is a formal refusal by a donee of property (by gift or by will) to accept the gratuitous transfer. Though seemingly an unusual event, disclaimers are actually quite common, for a variety of reasons. For example, a wealthy widow who has no need for the additional property willed by her deceased husband may…

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for retirement plans and certain health plans in the private sector. The objective of ERISA is to protect the rights of individual plan participants. ERISA requires plans to provide participants with plan information including important information about plan…

Under Section 2503(e) of the Internal Revenue Code (the “Code”), tuition payments made directly to an educational organization on behalf of a person, and payments for a person’s medical care made directly to the provider are not treated as taxable gifts. For example, grandparents who already take full advantage of the annual exclusion for gifts…

Although the charitable remainder trust offers considerable potential tax advantages that can reduce the effective cost of charitable giving, the fact remains that a portion of the donor’s wealth will be going to charity and not to the donor’s heirs. This represents an obviously significant dilemma for a charitably inclined individual making estate planning decisions.…

In some cases, a lifetime gift is inappropriate, either because of the size of the prospective donor’s estate, the donor’s age, or the nature of the estate assets. It is important, therefore, to consider whether large gifts are contraindicated. Size of Estate an Important Factor Examples one sees of lifetime gifts commonly involve people of…

In connection with plans for minimizing taxes, it should be noted that there is nothing improper or immoral in reducing or avoiding taxes by lawful means. No apology is necessary for any legally acceptable plan that will enable you to minimize state and federal taxes. As long as the transaction is bona fide, as long…

An applicable credit is allowed against the New York state estate tax when a New York taxable estate is not greater than 105% of the Basic Exclusion Amount. The Basic Exclusion Amount in 2019 is $5,740,000. POINT 1 – If the New York taxable estate is less than or equal to the basic exclusion amount,…

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