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

Elder law is an increasingly important area of law for clients. This month’s Alert examines a Wisconsin case concerning an Irrevocable trust which was included as an available asset for Medicaid purposes. The Alert also examines what they could have done differently to achieve a better result. Lucille Hedlund and her husband, Clarence, transferred the majority of their assets to their three children in 1991. The same day that Lucille and Clarence transferred the assets to their children, the … [Read more...] about Wisconsin Appeals Court Holds Assets of Irrevocable Trust are Available for Medicaid Eligibility Purposes

This month's Alert examines the IRS’ recent release of instructions regarding how to ensure portability of the applicable exclusion amount at the death of the first spouse. Many surviving spouses may see an estate tax return at the death of the first spouse to be unnecessary. This alert shows why advisors should document that they advised the filing of an estate tax return.The executor of the estate of a married decedent dying in 2011 and 2012 can carry forward the unused portion of the amount … [Read more...] about IRS Issues Instructions for Estate Tax Returns for Decedents Dying in 2011 and 2012

Clients occasionally attempt do-it-yourself estate planning. Sometimes they use software assistance, borrow from others’ documents, or amend their professionally prepared documents themselves. This month’s Alert looks at one such story and the havoc it wrought. In the end, the client’s goals were not achieved and her loved ones were pitted against each other in court. On occasion, a client will try to take matters into their own hands and amend their estate plan themselves. The reason is a … [Read more...] about A “Do-It-Yourself” Mystery: The Case of the Neighbor Girl and the Well-Meaning Widow

The estate tax law is a moving target, both at the federal and state level. This month’s Alert examines a case which illustrates how the changing laws can result in unintended results in your plan. Now, more than ever, it is important to review your estate plan periodically to ensure the outcome you want.The amount that can be distributed to children and other non-charitable beneficiaries free from federal estate tax at death is a constantly changing target. In 2000, this amount was $675,000. In … [Read more...] about Failure to Review Estate Plans Periodically Can Lead to Unintended Consequences

This month’s Alert examines the Obama Administration’s 2012 budget proposal and how it might affect estate, gift, GST, and income taxes. Further, the Alert looks at how our tax system compares to other developed countries. The Department of Treasury “General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals” presumes several important changes in the estate, gift, and generation-skipping transfer taxes. These changes include: Restoring the 2009 estate, gift, and GST … [Read more...] about 2012 Budget Proposal Includes Permanent Estate and Gift Tax Reforms