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Some well known planners, such as Stacy Eastland, are recommending consideration of the BDOT for families with significant wealth to plan with the existing $11.2 million exemption. Most of you are aware of the Beneficiary Defective Inheritor’s Trust (BDIT), which is funded with only $5,000, and provides that all of that $5,000 may be withdrawn …
Recently, the Alaska Supreme Court in Toni 1 v. Wacker put a nail in the coffin of domestic asset protection trusts as effective creditor protection for out of state donors. After a Montana state court issued a series of judgments against Donald Tangwall and his family, the family members transferred two pieces of property to …
The new tax act temporarily increases the lifetime estate exemption to $11.2 million. This change took effect on January 1, but sunsets on December 31, 2025. On January 1, 2026, the exemption reverts back to the current $5.6 million, subject to inflation adjustment. It is quite possible that the larger exemption doesn’t make it to …
As we wait to see if Congress can pass a tax bill, we now know that estate taxes for the very wealthy will not be repealed immediately or at all. The House bill that was passed yesterday bumps the lifetime exemption to $10 million indexed for inflation and retains the estate tax through 2023. The Senate …
The probate question I get asked the most often is whether a client should use a living trust to avoid probate. In many states the answer is an unqualified “yes.” In Texas, the answer is “it depends, but probably not.” A living trust is a revocable trust to which the client will transfer his or …
In my last blog post I noted that it might be a good time to reconsider discount planning with family limited partnerships (FLP). That thought has only increased over the last few weeks as the chances for tax reform dwindle. Indeed, while political predictions are a fools game, we now have to seriously consider a …
It Might Be Time to Party Like It Is 2012 With The Spousal Lifetime Access Trust Read More »
As we watch Congress for clarity on tax reform, I am reminded of the Tom Petty song “The Waiting.” Many clients are frozen, unwilling to do any planning. However, the fact is tax law changes all of the time, and any “reform” today may be gone tomorrow. Life and death go on. The real …
Charitable remainder trusts (“CRTs”) are split interests trusts, with the taxpayer retaining an income interest and charity receiving the remainder. The CRT often is used to defer gain on the sale of highly appreciated property. The taxpayer receives an income deduction for the value of the remainder interest going to charity and defers the capital …
A New Planning Opportunity with Charitable Remainder Trusts Read More »