In this month’s alert we examine how your clients, including LGBTQ clients and unmarried partners, can remove over $5 million free from estate tax and how this opportunity may be vanishing soon. Unless Congress takes action before year-end, which most experts think is unlikely, the amount that can be passed free of estate tax will drop from $5.12 million to $1 million on January 1, 2013. For a decedent with an estate of $5 million, this would result in an increase in estate tax of … [Read more...] about Use It Before You Lose It” Planning Equally Applicable to LGBTQ and Unmarried Partners

The estate tax exclusion is scheduled to revert to $1 million at year-end from the current level of $5.12 million. This Alert examines the current political landscape concerning the estate tax and suggests taking advantage of the current, historically-high exclusion amount before it’s too late. Senate Bill 3412 contains President Obama’s plan to extend the “Bush tax cuts” to people earning less than $250,000 of income per year. What it doesn’t contain is any provision regarding the estate tax. … [Read more...] about Tax Break Extension Legislation Excludes Estate Tax; Act Now to Lock In $5.12 Million Exclusion Amount

The Alert this month examines "portability" and the steps necessary to take advantage of it under newly-released regulations. For many years estate planning attorneys have had to draft complicated provisions into the estate plans of married couples in order to make maximum use of the applicable exclusion amount (the "AEA"). The AEA is the amount that can pass free from estate tax at the death of an individual. Technically, even without “portability,” a married couple can pass twice the AEA to … [Read more...] about IRS Issues “Portability” Guidance

This month's Alert examines the importance of proper IRA beneficiary designations. The Alert examines a case in which the stretch of IRA distributions was not maximized because of the beneficiary designation. A parent with a large retirement account often doesn't want to name a child as the direct beneficiary of the retirement plan. This might be because the child is a minor. It could be because the child has a disability and is receiving government assistance. Other reasons include the … [Read more...] about Planning Blunder Leads to Increased Income Taxes

With more than half of marriages ending in divorce, an increasing number of families are “blended families.” The Alert this month examines the unique issues faced in planning for blended families. Approximately 50% of first marriages, 60% of second marriages, and 75% of third marriages end in divorce. With those statistics in mind, it is not surprising that many couples doing estate planning have children from previous relationships. This can add complexity to the estate plan. One or more … [Read more...] about His, Hers, or Ours? – Estate Planning for Blended Families

This month’s alert examines the current, perhaps short-lived, opportunity for clients to give away millions of dollars during their lifetime without a gift tax. Unless the law changes, this narrow window will close at year-end. The lifetime gift tax exemption amount and the applicable exclusion amount (the amount that can be left free of estate tax) is $5,120,000 for 2012 (or double that amount for couples who plan properly. However, unless Congress acts before year-end, this amount will … [Read more...] about Millions in Tax Savings Available to Clients Who Act Quickly

This month's Alert examines how effective use of disclaimers can save millions in taxes. The Alert examines a ruling request presented to the IRS involving such a situation. Often parents do not consider the potential future success of their children in structuring their own estate plan. If a child is fortunate enough to have a taxable estate (over $5,120,000 currently, scheduled to drop to $1 million in 2013), giving the child an inheritance will only increase the tax burden of the child's … [Read more...] about Double Disclaimer Saves Millions in Estate and GST Tax

This month's Alert reviews the inflation adjustments applicable to federal taxation in 2012. It examines changes in the estate, gift, and generation skipping transfer taxes, as well as income taxes.Many changes have occurred with regard to the income, gift, estate, and generation skipping transfer tax in 2012. Most of these changes have come about due to indexing for cost of living.Estate Tax The applicable exclusion amount (the amount that can be given free of estate tax at death) has … [Read more...] about Tax Changes for 2012

This month’s Alert examines when the income of a trust may be considered available to creditors. The Alert examines a case involving the availability for purposes of determining alimony.The New Jersey case of Tannen v. Tannenhas drawn national attention. Mark and Wendy Tannen were married for nearly eighteen years. During the marriage, Wendy’s parents created and funded an irrevocable trust which was a third-party defendant in the suit. Wendy was the trust’s sole beneficiary and Wendy and her … [Read more...] about Income from Trust Excluded in Determining Alimony Payments

This month’s Alert examines the continuing uncertainty with the Estate and Gift Tax and the unique, limited-time opportunities which are available now. The Congressional “Super Committee” failed to reach bipartisan agreement in structuring a deficit reduction plan. This means that unless Congress takes action in 2012, there will be automatic budget cuts totaling $1.2 trillion over ten years, beginning in January 2013. Given that 2012 is an election year, both parties will be weighing whether … [Read more...] about Fate of Estate and Gift Taxes Remains Uncertain – But, Many Planning Options Remain Available For Now