Month: June 2020
To Forgive May Not Always Be Divine…
If you loan someone $10,000 and then either forgive or cancel part of the loan (perhaps because it is too difficult to collect the debt) and the forgiveness or cancellation is not a gift, you probably haven’t realized that such forgiveness will create taxable income...
IRA Saves A Missed Alternate Valuation Election
When an estate exceeds the applicable exclusion amount (the “Exemption”) of $5.490 million, a taxpayer is required to file a Form 706 for the decedent’s estate. Under the Internal Revenue Code (the “Code”), assets are valued as of the date of death. However, the Code...
Court Gets It Right- Limited Liability Company (LLC) Member Protection Works!
Many of our clients created LLCs to protect their assets inside the LLC from lawsuits by creditors against our clients individually. Prior to 2010 it was generally understood that if an LLC member was sued by an outside creditor and obtained a judgement against that...
Decanting…It Isn’t Just About Wine…
Some of you may have heard of decanting in the wine world. Apparently, sediment from the fermentation process can produce an undesirable taste in wine. The wine is decanted to separate the wine from these sediments. In the trust world, a trust can be “decanted” from...
A New Will and Revoking Your Old Trust… The Devil is in the Details!
Many individuals have created revocable trusts that no longer meet their needs or they do not want a trust. They do not care about “avoiding” probate and some actually want court supervision! What happens if an old revocable trust is not properly revoked or, having...
Relief for Late Filed Portabilty Elections!
The Internal Revenue Service (“IRS”) has offered needed relief for portability elections. Portability, discussed in a prior blog, can save a surviving spouse’s beneficiaries over $2 million (in 2017) in estate taxes! However, to utilize such savings, the surviving...
Irrevocable Life Insurance Trust (“ILIT”).. still important?
Many of our clients created an ILIT to hold life insurance outside of their estate to provide liquidity to help their children pay estate taxes. Generally an ILIT is created to avoid the triggering aspects of IRC Section 2042 so life insurance on the decedent’s life...
NEW.. Final Regulations Issued for Portability
As I have mentioned in a previous blog the concept of portability enables a surviving spouse to take advantage of his or her deceased spouse’s unused exemption (“DSUE”) amount. For example, if Sue dies and only uses 2 million of her 5.430 million exemption amount,...
What’s Mine Is Yours… Or Maybe Not!
Even though Florida is not a community property state, Florida does have a statute that addresses community property for residents of Florida who have moved here from a community property state. Community property can be very advantageous for tax and marital reasons....
U. S. Supreme Court Rules on Life Insurance/IRA Divorce Statute…Clarity for Practitioners and Clients
A recent blog discussed the issue in the Sveen v. Melin case which has now been decided by the Supreme Court of the United States (the “Court”). The Court determined that a Minnesota statute (similar to Florida’s statute) is constitutional under the Contracts Clause...